vele pmo d ent victoria annual report 2018-19 · vele pmo d ent victoria. chairperson’s report 2...

ANNUAL REPORT 2018-19

DEVELOPMENT VICTORIA

Chairperson’s report 2

Chief Executive Officer’s report 3

About Development Victoria 4

Declared projects and Ministerial directions 6

Year in Review 7

Key achievements 2018-19 8

Development Victoria’s Board of Directors 20

Executive Leadership Team 23

Report on Operations 24

Development Victoria Projects 2018-19 25

Our people 28

Financial Statements 38

Disclosure Index 83

CONTENTS

2 | Development Victoria Annual Report 2018-2019

CHAIRPERSON’S REPORT

Development Victoria was created to deliver urban revitalisation for all Victorians, and our second annual report reflects how the organisation has grown over the past 12 months. We have moved quickly from establishment phase to settling into a maturity across our businesses.

Our goals have been ambitious in delivering urban renewal, civic projects and precinct planning across the State. I’m proud to report that Development Victoria is leading the way to solve the challenges of population growth, housing affordability and how best to drive economic development through inner-urban precincts.

We have been appointed to prepare the business case to redevelop the State Basketball Centre, coordinate and deliver the Fitzroy Gasworks site, develop the Ballarat and Bendigo GovHubs and plan for Melbourne’s creative future with the Arts Precinct Transformation. These projects showcase the many talents at Development Victoria.

Gavin Jennings MLC, Minister for Priority Precincts, has provided Development Victoria with a strong and clear mandate to work collaboratively and nimbly across government in areas of policy delivery – particularly in helping government to solve complex housing issues and deliver smartly planned precincts.

Thanks go to the Minister and his team for this engagement. I’d also like to thank and acknowledge Jacinta Allan MP.

I would like to thank my colleagues on the Board for their clear vision and understanding of what Development Victoria can achieve.

On behalf of the Board, I extend my thanks to Chief Executive Officer Angela Skandarajah. In Angela we have a CEO who leads from the front and behind – carving the way for the hardworking, dedicated team at Development Victoria to grow in their roles and deliver for government. I look forward to the next phase of our journey.

James MacKenzie Chairperson

29 August 2019

CHIEF EXECUTIVE OFFICER’S REPORT

I am pleased to present Development Victoria’s second annual report and my first as Chief Executive.

Development Victoria has spent the last 12 months delivering critical civic infrastructure, renewing important precincts for commercial and residential activity, as well as increasing housing diversity in places close to jobs, transport and services. We have welcomed the creation of the portfolio for Priority Precincts and the opportunity to work with Minister Gavin Jennings to deliver projects for our growing State.

Precinct planning and delivery is core business for Development Victoria, especially with our history in Docklands, Dandenong, Wodonga and now Fishermans Bend. Opportunities abound for the government’s declared priority precincts and we are working collaboratively with the new Department of Jobs, Precincts and Regions to shape Melbourne for the future.

Key civic infrastructure projects in Development Victoria’s pipeline received funding in the May State Budget – including funding for business case development and planning for the State Basketball Centre and development of the final stage of the Geelong Arts Centre. Projects of cultural significance are where Development Victoria shines. These projects will add to the great work underway at the State Hockey and Netball Centre, the Melbourne Arts Precinct Transformation and Melbourne Park.

As the housing needs of Victorians change, so too does the approach with our property portfolio. In 2018-2019, Development Victoria increasingly focused on affordability targets to align with government policy. Building on the experience gained developing thousands of homes in projects such as Riverwalk in Werribee, Jacksons Hill and Valley Lake, we are focused on delivering affordable and diverse housing at new locations, including in Fitzroy, Altona North and Springvale South.

Development Victoria’s Affordable and Diverse Communities Framework will guide this critical work. The Framework will make sure that our future property portfolio will deliver affordable housing at scale and build more diverse and resilient communities.

Our work on the Ballarat GovHub, the Fitzroy Gasworks and Melbourne Arts Precinct highlight the incredible talent and growth in our capability in design leadership, engagement and master planning.

It is not just our project portfolio that is growing, our team culture is too. This year we launched Development Victoria’s journey towards a Reconciliation Action Plan, achieved 50 per cent gender balance in our workforce, developed a sustainability framework and increased our OHS awareness with a new internal campaign, ‘DV Developing Safely’.

I am proud of the incredible talent and growth in our team’s capability and the demonstrable new level of sophistication in how we collaborate with each other and across government.

I extend my thanks to the former Minister for Major Projects, The Hon. Jacinta Allan for her work with us in 2018 and to Minister Jennings for his support over the last six months. I would also like to thank James MacKenzie and our other Board members for their ongoing support and guidance.

Finally, it’s the team at Development Victoria that makes this organisation strong, resilient and rewarding. Thank you for your commitment to our vision and innovative ways of problem solving as we work together for the benefit of all Victorians.

Angela Skandarajah Chief Executive Officer

29 August 2019

OUR POLICY PILLARS

Promoting and delivering housing diversity and affordable housing

Delivering projects to drive economic development

Planning and developing strategic urban renewal precincts

Delivering social and economic infrastructure

Pursuing value capture and creation opportunities

Housing Economic development

Urban renewal

Value creation and capture

Social and economic infrastructure

1 2 3 4 5

Development Victoria is shaping the way Victorians live. We develop and revitalise public buildings and land to create spaces and homes that help make Victoria a great place to live.

DEVELOPMENT VICTORIA’S STATEMENT OF CORPORATE INTENTDevelopment Victoria was established in April 2017 and is governed by the Development Victoria Act 2003. Development Victoria also has powers under the Docklands Act 1991.

Each year Development Victoria prepares a Corporate Plan which sets out the organisation’s mission, purpose and strategic objectives for the coming period. In 2018-19, Development Victoria’s goals were:

ABOUT DEVELOPMENT VICTORIA

• To expertly and responsibly manage the design and delivery of major civic projects, property development and urban renewal projects on behalf of the Victoria Government, in the interests of the Victorian community;

• To be respected across the Victorian Government and within the development and infrastructure sector as a centre of excellence, with top tier skills, expertise and commercial acumen; and

• To be recognised as an employer of choice for talented professionals across the public and private sectors.

DEVELOPMENT VICTORIA WILL:• Identify opportunities to increase housing diversity

in places close to jobs, transport and services;

• Lead projects to create cultural, recreational and civic facilities that enrich our communities and enhance Victoria’s reputation; and

• Revitalise major activity centres and urban precincts to stimulate economic activity and improve access to jobs closer to where people live.

CORPORATE GOVERNANCEDevelopment Victoria is a statutory authority governed by a Board of Directors.

RESPONSIBLE MINISTER

For the period from 1 July until 22 November 2018, the Minister for Major Projects had primary responsibility for Development Victoria under the Development Victoria Act 2003.

Since 22 November 2018, the Minister for Priority Precincts has primary responsibility for Development Victoria under the Development Victoria Act 2003.

TREASURER

The Treasurer is responsible for oversight of Development Victoria’s finances in accordance with the Financial Management Act 1994. This role requires the Treasurer to manage and monitor Development Victoria’s financial position including its capital structure and operating performance. Debt finance for projects is approved by the Treasurer on a case-by-case basis, and the organisation’s aggregate financial assumptions and forecasts are approved annually by the Treasurer through the Corporate Plan.

DEVELOPMENT VICTORIA BOARD

The role and function of the Development Victoria Board is established under the Development Victoria Act 2003. The Board has responsibility for strategic oversight of the organisation and considers projects presented by management for approval, before they are presented to the Minister.

Development Victoria is established as a Public Non-Financial Corporation (PNFC) in accordance with guidelines established by the Australian Bureau of Statistics. These guidelines define the following business characteristics for entities classified as a PNFC:

1. All or the majority of the entity’s total production costs should be covered by total sales;

2. Primary activities of the entity should involve the market production of goods at economically significant prices (economically significant prices are defined as prices that have a significant effect on the amounts that producers are willing to supply and, on the amounts, purchasers are willing to buy);

3. The entity should compete with other providers and the customer’s choice of provider is not influenced by government interventions; and

4. The entity is controlled by government in terms of its general corporate policy (and strategic direction). This is proxied by ownership, the ability to appoint/remove board members and government provision of debt.

LEGISLATIONDevelopment Victoria was established on 1 April 2017 and operates under the Development Victoria Act 2003.

The functions of the organisation set out in the Act include:

• Carrying out property development and social and economic capital works projects in accordance with government policies and strategies;

• Providing advisory services; and

• Developing declared projects.

The Act requires Development Victoria to carry out its functions using commercial disciplines.

Development Victoria also has powers under the Docklands Act 1991 to undertake the Docklands project.

STATUTORY AUTHORITY: Development Victoria

GOVERNING ACT: Development Victoria Act 2003

INCORPORATED: 1 April 2017

REGISTERED ADDRESS: Level 9, 8 Exhibition Street Melbourne 3000

ABN: 61 868 774 623

Development Victoria Annual Report 2018-2019 | 5


DECLARED PROJECTS AND MINISTERIAL DIRECTIVES

One of the key purposes of Development Victoria under the Development Victoria Act 2003 is to undertake new declared projects, and complete existing declared projects.

The following projects are declared projects which were or are currently being completed by Development Victoria as at 30 June 2019:

• Ballarat Off Site Store Module 2 (completed)

• Ballarat West Employment Zone Development

• Flinders Street Station Administration Building (completed)

• Geelong Arts Centre

• Kew Residential Services Redevelopment

• Melbourne Park Redevelopment

• Parkville Gardens

• Revitalising Central Dandenong

• State Library Victoria Redevelopment

• State Netball and Hockey Centre Redevelopment

During the reporting period Development Victoria did not receive any direction from the Minister under Section 9 of the Development Victoria Act 2003.


CONSTRUCTION OF THE BALLARAT GOVHUB COMMENCES

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REMEDIATION COMMENCES AT FITZROY GASWORKS

RECORD PROPERTY SETTLEMENTS

WINS BEST HERITAGE DEVELOPMENT AWARD

STAGE 3 OF REDEVELOPMENT STARTS

WORK STARTS ON STATE NETBALL & HOCKEY CENTRE

WORK BEGINS ON MASTER PLAN FOR

ANGELA SKANDARAJAH - APPOINTED CEO -

NEW INTERNS

NEW OHSFRAMEWORK

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DOWNLOADS OF THE

NEW PARK


ADVISORY & CIVIC INFRASTRUCTUREDevelopment Victoria provides project advisory services and is responsible for managing major projects on behalf of government clients through the whole project lifecycle, from conception and commissioning through to delivery. These cultural, recreational and civic facilities enrich our communities and enhance Victoria’s reputation.

BALLARAT OFFSITE STORAGE MODULE 2 Development Victoria is delivering the Ballarat Offsite Storage Module 2 (BOSS2), which is a specialist facility for the storage of valuable and sensitive collection items including paintings, sculptures, costumes, film and books.

PROJECT OBJECTIVE:To deliver a specialist, climate-controlled offsite storage facility for the State Library Victoria which will allow for the storage of valuable and sensitive collections.

POLICY OBJECTIVE:Social and economic infrastructure

2018-19 KEY ACHIEVEMENTS:• Practical completion was achieved on 10 May 2019.

Investment managed by Development Victoria to date:

$19.0 million

FLINDERS STREET STATION REDEVELOPMENTDevelopment Victoria is managing the Administration Building portion of the $100 million upgrade of Flinders Street Station. The Administration Building includes waterproofing, refurbishment works, structural strengthening and rectification works and repainting of the station to its original heritage colours.

PROJECT OBJECTIVE:Preservation of a key Melbourne landmark


2018-19 KEY ACHIEVEMENTS:• Restoration works on the Administration Building completed.


$64.7 million

KEY ACHIEVEMENTS 2018-19


GEELONG ARTS CENTRE - STAGES 2 AND 3The Geelong Arts Centre is Victoria’s most significant cultural institution outside of Melbourne. It brings a wide array of creative and cultural experiences to Geelong and the region and has given many local artists their first taste of the stage.

PROJECT OBJECTIVE:Development Victoria is responsible for the delivery of an expanded arts centre with improved creative space for the Geelong community and with the capacity to meet the city’s anticipated future growth.


2018-19 KEY ACHIEVEMENTS:• Structure completed;

• Glazed facade installed to the building, the only instance of this system used in Victoria;

• Façade rectification to the Church commenced;

• Funding for Stage 3 secured, and design commenced.

Investment managed by Development Victoria to date (Stage 2):

$26.5 million

MELBOURNE ARTS PRECINCT TRANSFORMATIONThe planned transformation of Melbourne’s Arts Precinct is proposed to include a new NGV Contemporary gallery, redevelopment of Arts Centre Melbourne, the creation of a new creative hub at 1 City Road and the development of new public open space. The Victorian Government has invested $208 million over two years for the planning and design phase of the project.

PROJECT OBJECTIVE:The proposed project will bring 18,000 square metres of new and renewed public space and create a connection between St Kilda Rd and Southbank, linking the NGV and Arts Centre Melbourne with adjoining institutions including the Melbourne Recital Centre, ACMI X, the Victorian College of the Arts and Ballet Australia.


2018-19 KEY ACHIEVEMENTS:• Completion of the schematic design for the refurbishment

of Arts Centre Melbourne’s Theatres Building;

• Commencement of the design work on the master plan and public open space;

• Detailed planning for the NGV Contemporary and 1 City Road projects.

KEY ACHIEVEMENTS 2018-19

Artist Impression Artist Impression


MELBOURNE PARK REDEVELOPMENT – STAGES 2 AND 3Development Victoria is working with Sport and Recreation Victoria, Melbourne and Olympic Parks Trust and Tennis Australia to deliver stages 2 and 3 of the Melbourne Park Redevelopment. Stage 3 includes a new function and media centre, a new multi-purpose show court, and a central logistics hub. Stage 3 is expected to be completed in 2023.

PROJECT OBJECTIVE:The creation of a world-class sports and entertainment precinct to support Melbourne’s broader tourism, sporting and major events strategies, as well as ensuring the Australian Open remains in Victoria until at least 2036.


2018-19 KEY ACHIEVEMENTS:• The completion of the Rod Laver Arena Eastern Annex,

which features bars and restaurants, improved player and artist facilities and an expanded public concourse for the Australian Open 2019;

• Commencement of works on Stage 3.


Stage 2 $346.2 million

Stage 3 $20.5 million

STATE BASKETBALL CENTRE Development Victoria is managing the design and planning of the State Basketball Centre at Knox on behalf of the Victorian Government and Knox City Council. The proposed upgrade will provide additional basketball courts, upgraded administration facilities, a centre of excellence and new training facilities.

PROJECT OBJECTIVE:To provide better facilities with enhanced functionality, accessibility and capacity that will enable increased levels of basketball and gymnastic participation at a local and State level.


2018-19 KEY ACHIEVEMENTS:• Funding for planning and design announced;

• Project planning commenced.

Artist Impression


STATE LIBRARY VICTORIA REDEVELOPMENT (VISION 2020)Development Victoria is leading the delivery of the Vision 2020 redevelopment of the State Library Victoria. Staged over five years the project will enhance the capacity of the State Library to deliver services and programs to wider audiences across Victoria.

PROJECT OBJECTIVE:To deliver increased operational capacity and consolidate commercial opportunities for improved community access and cultural engagement while conserving the heritage qualities of the State Library Victoria.


2018-19 KEY ACHIEVEMENTS:• Achieved practical completion of works including the

new Russell Street Welcome Zone, Isabella Fraser Function Space, Victoria Gallery, Swinburne Arts Reading Room, McArthur Gallery Family History and Newspapers Reading Room;

• Commencement of works, including a new entrance on Swanston Street.


$ 68.0 million

STATE NETBALL AND HOCKEY CENTRE REDEVELOPMENTThis $64.6 million redevelopment project is part of the Victorian Government’s record investment in women’s sport. The upgrade will provide six new indoor netball courts, a new indoor hockey facility, a high-performance strength and conditioning gym, and establish the Women in Sport Leadership Centre.

PROJECT OBJECTIVE:To create a national standard combined sporting facility for improved user experience and performance. This is in line with the State’s focus to increase female participation in sport.


2018-19 KEY ACHIEVEMENTS:• Works commenced on site in February 2019.


$6.1 million

Artist Impression


Development Victoria leads the long-term urban renewal of some of the State’s priority precincts to stimulate economic activity.

PRECINCT PROJECTS

DOCKLANDSDocklands is the largest government-led urban renewal project under construction in Australia. Docklands is currently home to more than 13,000 residents and 65,000 workers. The precinct has also sustained a significant number of construction jobs over the past 20 years.

PROJECT OBJECTIVE:Urban renewal in Docklands is revitalising a once industrial area to deliver housing, jobs and community spaces, as well as reconnecting the CBD with the waterfront.

POLICY OBJECTIVE:Urban renewal

2018-19 KEY ACHIEVEMENTS:• Completion of site remediation to enable and commencement

of construction for the Docklands Primary School;

• Completion of seven developments resulting in the delivery of:

• 557 residential and serviced apartments;

• 115,000 square metres of commercial floor space, for businesses including Lendlease, Arup, Transurban, Port of Melbourne and ANZ;

• New Hoyts cinema as well as hospitality and retail facilities at the District Docklands in NewQuay.

• Commencement of construction of four developments which will deliver:

• 422 residential apartments;

• 200 hotel rooms in a new Marriott Hotel;

• a new supermarket in The District supported by 25 speciality retailers.

• Approval of the Bolte Precinct West Development Plan;

• Completion of the first stage of the Sky Park in Melbourne Quarter;

• Collaboration with the AFL and other stakeholders on the State-funded Docklands Stadium upgrade.

GMH, FISHERMANS BENDThe Victorian Government purchased the site to develop it into Australia’s leading precinct for advanced manufacturing, design, engineering and technology excellence. Development Victoria is leading the master planning of the site to facilitate future development opportunities.

PROJECT OBJECTIVE:Redevelop the GMH site as a catalyst for development in the Fishermans Bend Employment Precinct.

POLICY OBJECTIVE:Urban renewal

2018-19 KEY ACHIEVEMENTS:• Sale of land to the University of Melbourne to facilitate

planning and design of phase 1 of the University’s new engineering school for around 1,000 students;

• Agreed a lease with global aerospace and defence company Leonardo for a new engineering facility.

Artist Impression


JUNCTION PLACE, WODONGAJunction Place, Wodonga is regional Australia’s largest urban renewal project. It is a 15-20 year project which will double the size of Wodonga’s central business district by revitalising the former historic railway station and rail yards in central Wodonga.

PROJECT OBJECTIVE:To raise the profile of Wodonga and reposition the city as a destination of choice to live, work and visit, accommodate population growth, enhance economic growth and development, attract private investment and create employment.

POLICY OBJECTIVES:Urban renewal, Economic development

2018-19 KEY ACHIEVEMENTS:• Completed Richardson Park and Sidings Park to provide

new open space in central Wodonga;

• Planning approval granted for 70 new townhouses;

• New $70 million, 10-screen cinema and entertainment centre secured through a joint venture between United Cinemas and Central Place.

REVITALISING CENTRAL DANDENONGThis long-term project is rejuvenating Dandenong’s city centre. Development Victoria is working with the City of Greater Dandenong and other stakeholders to create a vibrant precinct that provides commercial, residential, retail, and community services, as well as public open spaces.

PROJECT OBJECTIVE:To raise the profile of Dandenong and reposition the city as a destination of choice to live, work and visit, accommodate forecast population growth, stimulate economic development and private sector investment and enhance livability.

POLICY OBJECTIVES:Urban renewal, Economic development

2018-19 KEY ACHIEVEMENTS:• Completion of a new, multi-sport community park,

in collaboration with City of Greater Dandenong;

• Planning approval received for a $40 million mixed use development on Site 10 by the Orion Group;

• Completion of enabling infrastructure works at Abbotts Street, to allow for future redevelopment of adjacent sites;

• Closure and decommissioning of the PEP facility.


$205.5 million (includes Victorian Government and other investment)


Through its property development activities, Development Victoria is responsible for the development of surplus and under-utilised government land to deliver and promote housing diversity, social and affordable housing and mixed-use projects.

PROPERTY DEVELOPMENT

ALFIE AT ALTONA NORTHThe Alfie residential project at Altona North will provide 127 new homes. Ten per cent of the dwellings are earmarked to be delivered as affordable housing. The project will include a community park and multi-generational housing.

PROJECT OBJECTIVE:To deliver diverse and affordable housing for a growing community.

POLICY OBJECTIVES:Housing, Urban renewal

2018-19 KEY ACHIEVEMENTS:• Planning approval received for all three stages of

the development;

• Sales launch in August 2018;

• Civil works for Stage 1 commenced in December 2018;

• Builder appointed for Stage 1, consisting of 45 homes in February 2019.

AURORAAurora is a master-planned community on approximately 650 hectares in Melbourne’s north. Aurora is now home to over 8,000 people and has grown into a thriving community.

PROJECT OBJECTIVE:To create a thriving residential community supported by community infrastructure that leads the way in sustainable living and provides a range of diverse housing options.

POLICY OBJECTIVE:Housing

2018-19 KEY ACHIEVEMENTS:• Settled final sale contract with Lendlease in October 2018;

• Aurora Town Centre Park opened by the Minister for Priority Precincts at community day attended by approximately 4,000 people;

• Lodged a permit application with Whittlesea City Council for the development of 83 townhouse lots.

Artist Impression


BALLARAT GOVHUBDevelopment Victoria is leading the development of a new government office precinct on the Civic Hall site in Ballarat’s CBD, in partnership with Regional Development Victoria, Department of Premier and Cabinet and Ballarat City Council. The Ballarat GovHub will accommodate up to 1,000 government employees and will help to revitalise Ballarat’s CBD and stimulate economic growth.

PROJECT OBJECTIVE:To encourage regional economic growth, support employment and revitalise Ballarat’s CBD.

POLICY OBJECTIVE:Economic development

2018-19 KEY ACHIEVEMENTS:• Building contractors appointment in November 2018;

• Construction commenced in January 2019.

CIRQ POINT COOKCIRQ Point Cook is the first medium-density housing project delivered by Development Victoria. The development features two, three and four-bedroom townhouses and has been designed to offer high-quality, affordable housing close to community services.

PROJECT OBJECTIVE:To deliver high-quality, affordable housing close to schools and the Point Cook Town Centre.


2018-19 KEY ACHIEVEMENTS:• Project achieved Silver Standard of Liveable

Housing Australia’s design guidelines and the UDIA’s EnviroDevelopment certification;

• Builder appointed in September 2018;

• Construction commenced in February 2019.

Artist Impression Artist Impression



FITZROY GASWORKSThe former Fitzroy Gasworks site is an important part of Fitzroy North’s industrial and social heritage. The vision for the site is to create an urban village that includes new housing, a senior high school, a sports centre and open space. The site is owned by the State government and provides an opportunity to create an urban village with new homes, shops and community facilities, including a school and sports courts.

PROJECT OBJECTIVE:Redevelopment of the former Gasworks to create a new urban village


2018-19 KEY ACHIEVEMENTS:• Commenced work on a Development Plan;

• Continued an ongoing program of community engagement;

• Secured Heritage Victoria approval to relocate the historic Porter Store;

• Stage 2 remediation works commenced in May 2019.

KEW RESIDENTIAL SERVICESThe $400 million Kew Residential Services project involves the redevelopment of the former Kew Cottages facility into a high-quality housing development. The redevelopment integrates 20 community homes with more than 260 private dwellings. The project is governed by a joint venture development agreement with the Kew Development Corporation Pty Ltd.

PROJECT OBJECTIVEDelivery of high-quality housing; along with meeting the current and future housing needs of people with a disability.


2018-19 KEY ACHIEVEMENTS:• Restoration of the heritage buildings completed.


$16.1 million

Artist Impression


OFFICER TOWN CENTREDevelopment Victoria owns 150 hectares in Officer that provides opportunities for new infrastructure, housing and jobs in the Officer area.

PROJECT OBJECTIVE:To create a new community and diverse and affordable housing options.

POLICY OBJECTIVE:Housing, Economic development, Value creation and capture, Social and economic infrastructure

2018-19 KEY ACHIEVEMENTS:• Sale and settlement of land holdings;

• Commenced planning work on the development of a new residential development;

• Victorian Planning Authority commenced work to amend the Officer South Precinct Structure Plan.

Image courtesy of Cardinia Shire Council

PARKVILLE GARDENS Parkville Gardens is a housing development on a 20-hectare site that was formerly the Athletes’ Village for the 2006 Commonwealth Games. The post-games phase of the project includes the staged redevelopment of the site into a residential estate. Upon completion, Parkville Gardens will include more than 1,580 dwellings, with 20 per cent dedicated to social housing; the retention of heritage buildings; the creation of wetlands and new parklands.

PROJECT OBJECTIVE:Delivery of a residential project featuring environmentally sustainable design, social housing, disabled access and community services.


2018-19 KEY ACHIEVEMENTS:• Completion of 172 apartments in Stage 4.


$16.1 million



RIVERWALKDevelopment Victoria’s Riverwalk project is located on 197 hectares of land on the former Werribee treatment plant site in Melbourne’s west. Upon completion, Riverwalk will feature 2,260 homes and 7,300 new residents. The development features open space, a 1.4-hectare Village Park including a basketball court, water play areas, bike trails, playground and BBQ facilities.

PROJECT OBJECTIVE:To create a cosmopolitan and connected village that leads the way in sustainable living and provides a range of diverse housing options.


2018-19 KEY ACHIEVEMENTS:• Commenced construction on stages 23–26 (226 lots);

• Sold the first site in the new town centre site;

• Obtained planning approval to transfer active open space to Council;

• Delivered a series of community “work out” sessions exclusively for Riverwalk residents.

TAYLORS QUARTER Taylors Quarter is an urban infill site in Taylors Lakes that is close to the Watergardens Shopping Centre, schools, parklands and transport options. The development will feature a specially designed park that includes a picnic area, playground and multi-purpose sports court.

PROJECT OBJECTIVE:To deliver a mixed-use development featuring a diverse range of houses in an area close to jobs, transport and amenities.


2018-19 KEY ACHIEVEMENTS:• Obtained Council approval;

• Sales commenced, with the first release selling out in June 2019.

Artist ImpressionArtist Impression


Riverwalk


DEVELOPMENT VICTORIA’S BOARD OF DIRECTORSJAMES MACKENZIE (CHAIRPERSON)James MacKenzie is an experienced Australian company director. He currently serves as Chairman of Victorian Funds Management Corporation and Slater and Gordon Lawyers. James was previously President of the Victorian Arts Centre Trust, Chairman of the Transport Accident Commission (TAC) and Worksafe Victoria, Managing Director of Funds Management and Insurance at the ANZ Banking Group, Chief Executive Officer of Norwich Union Australia, and the TAC. He has been a member of the COAG Business Advisory Forum. James has a Bachelor of Business from Swinburne University, and is a Fellow of the Australian Institute of Company Directors and the Institute of Chartered Accountants Australia and New Zealand. In 2001, he was awarded the Centenary Medal for services to Public Administration.

GRAEME PARTON (ACTING DEPUTY CHAIRPERSON)Graeme is a highly experienced property, construction and development adviser with over 40 years’ experience and has worked in high-rise commercial projects, publicly-listed companies and development/property trust management organisations in Australia. Having retired from his position as Partner and Director at Charter Keck Cramer, he now owns Aequitas Advisory Pty Ltd, a strategic property consultancy. Graeme has provided advice to local, state and federal governments, major corporations and superannuation funds, and private family businesses on property investment and development. He is Chairperson of the RMIT University School of Property Construction and Project Management Advisory Board, Chairperson of David Lock Associates (Australia) Pty. Ltd., a Council Member of the 52nd Anglican Diocese of Melbourne Diocesan Council (the governing body) and Adviser to the Archbishop, Director of St John’s Foundation Limited, a member of the Anglican Diocesan Corporation, and a Board Committee Member of the Australian Ballet. Graeme is a member of the Property Council of Australia’s Diversity Committee and is also a graduate of the Australian Institute of Company Directors.

REBECCA CASSONRebecca has a background in government, industry and the not for profit sector. She has held senior roles with responsibilities including international engagement, government relations and major projects, together with policy development and implementation. Rebecca holds an MA by Research in Politics and Government, and has experience in economic development, inward investment, business development, planning and urban development, education and skills, emergency planning and the visitor economy. Rebecca was appointed to the Kardinia Park Stadium Trust in 2016. Rebecca has worked across all tiers of government and was appointed CEO of Master Builders Victoria in January 2019.

LOU FARINOTTI Lou is a senior partner of the national law firm Holding Redlich. Lou was Holding Redlich’s Victorian managing partner for over 20 years. Lou has been practising as a property lawyer for over 40 years. In his practice Lou has acted on behalf of a number of Australia’s biggest property owners and developers as well as Councils, Governments and individuals. He has dealt with all facets of property law, from structuring, acquisitions, planning, sustainability, environmental, taxes and duties, leasing, disposal and succession. Over the years Lou has acted for several of Melbourne’s major property developers in well over 100 major apartment and property projects. Lou headed up Holding Redlich’s China/Asia initiative for several years, which has provided Lou with valuable experience and an understanding of Chinese and Asian business attitudes and culture.

MEGAN HAASMegan is a Council Member and Chair of the Audit and Risk Committee at RMIT University. Megan was previously Cyber and Forensic Services Partner at PricewaterhouseCoopers (PwC) where she spent a number of years based in Hong Kong working across Asia. After spending many years advising audit committees as part of the assurance practice specialising in business and information technology processes and controls, most recently Megan has focused on working with her clients to increase stakeholder confidence and governance of cyber security and privacy, corruption risks, anti-fraud programmes, compliance and post-incident remediation.

NATALIE MACDONALDNatalie MacDonald commenced at La Trobe University in September 2012 and is currently Vice-President (Development). Natalie was previously the Vice President (Administration) for La Trobe University and prior to that, Director-General of the Queensland Government’s Department of Housing and Public Works. As Vice President (Development), Natalie is focused on the transformation of La Trobe University’s campuses to create economic growth, community value and high-quality research, teaching and student life environments. Natalie has extensive experience in leading the delivery of corporate services, information services, building and design, accommodation, maintenance, facilities management and procurement services and the delivery of government services across wide geographical areas. She has served on a number of Commonwealth and State bodies and not-for-profit, superannuation and research boards.


JACQUI WALTERSJacqui is an independent consultant and Director. She has held senior roles with advisory firms in Australia and internationally. She has advised local, state and federal government clients on improving major capital project performance and infrastructure outcomes. Jacqui is Chair of CleanCo Queensland Ltd, a non-executive Director and Chair of the Risk and Audit Committee of Slater & Gordon Ltd, and Chair of the Citytrain Response Unit (Qld). She recently resigned as Chair of the Risk and Audit Committee of Building Queensland. Jacqui is also a Partner of Era Innovation, an advisory firm enabling long-term resilience in Australian organisations by creating systematic, disciplined innovation capability.

FORMER BOARD MEMBERS

TAMARA BREZZIResigned as Board Director, effective 1 May 2019.

TONY DE DOMENICO OAM Resigned as Deputy Chairperson, effective 18 March 2019.

JUSTIN HANNEY Resigned as Board Director, effective 29 November 2018.

CHRISTINE WYATTTenure as Board Director ended 1 March 2019.

BOARD MEMBER

ELIGIBLE TO ATTEND

ATTENDED NOTE

James MacKenzie 11 11

Rebecca Casson 11 9

Megan Haas 1 1Observer from 9 May 2019; appointed as Board Director, effective 14 May 2019

Graeme Parton 11 11Appointed Acting Deputy Chairperson effective 9 May 2019

Natalie MacDonald 11 8

Jacqui Walters 1 1Observer from 9 May 2019; appointed as Board Director, effective 14 May 2019

Lou Farinotti 11 10 Appointed as Board Director, effective 1 July 2018

Justin Hanney 5 4 Resigned as Board Director, effective 29 November 2018

Christine Wyatt 7 7 Tenure as Board Director ended 1 March 2019

Tamara Brezzi 9 8 Resigned as Board Director, effective 1 May 2019

Tony De Domenico OAM 8 8 Resigned as Board Director, effective 18 March 2019.

THE BOARDThe Board is responsible for the governance and oversight of Development Victoria, including its strategic direction and performance. A framework for effective management has been established through delegated authorities, control mechanisms and risk management strategies.

The Governor in Council appoints Directors for periods not exceeding five years. The Board is to consist of a Chairperson, a Deputy Chairperson and no more than seven other Directors.

As at 30 June 2019, the Board comprised of seven Directors. During the year, three Directors resigned, one Director’s tenure expired, and three new Directors were appointed. The Board ensures that the government is informed of all major issues affecting Development Victoria. Board meetings are held monthly, or more frequently if required. The Chief Executive Officer and the Group Head, Operations are invited to attend each Board meeting. Attendance by Directors at Board meetings held during the reporting period is detailed below.

Directors’ fees and related party transactions with Directors and their related entities are fully disclosed in Notes 8.6 and 8.7.

DEVELOPMENT VICTORIA BOARD ATTENDANCE DEVELOPMENT VICTORIA HELD 11 BOARD MEETINGS IN 2018-2019.


COMMITTEES OF THE BOARDDevelopment Victoria has three Board Committees. The Audit and Risk Committee, Investment Committee and People, Culture and Remuneration Committee.

AUDIT AND RISK COMMITTEE The Audit and Risk Committee assists the Board by overseeing and advising on matters of accountability and internal control relating to financial, risk and compliance management. The Committee routinely receives reports from both internal and external auditors.

The Audit and Risk Committee consists of the following members:

• Natalie MacDonald (Chairperson) – Director

• James MacKenzie – Chairperson of the Board

• Megan Haas – Director (member from 14 May 2019)

• Tamara Brezzi – former Director (member until 1 May 2019)

• Tony De Domenico OAM – former Deputy Chairperson of the Board (member until 18 March 2019)

INVESTMENT COMMITTEE The Investment Committee ensures the appropriate oversight of Development Victoria’s project acquisitions, projects and developments. The Investment Committee makes recommendations to the Board in relation to the financial and technical viability of project acquisitions and development opportunities.

The Investment Committee comprises the following members:

• Graeme Parton (Chairperson) – Acting Deputy Chairperson of the Board

• James MacKenzie – Chairperson of the Board (reappointed member from 9 May 2019)

• Lou Farinotti – Director (member from 28 August 2018)

• Jacqui Walters – Director (member from 14 May 2019)

• Tony De Domenico OAM – former Deputy Chairperson of the Board (member until 18 March 2019)

• Justin Hanney – former Director (member until 29 November 2018)

• Christine Wyatt – former Director (member until 1 March 2019)

PEOPLE, CULTURE AND REMUNERATION COMMITTEE The People, Culture and Remuneration Committee set the strategic direction for Development Victoria’s management of its people and determines the policy and practice for executive remuneration.

The People, Culture and Remuneration Committee consists of the following members:

• Rebecca Casson (Chairperson) – Director

• James MacKenzie – Chairperson of the Board

• Graeme Parton - Acting Deputy Chairperson of the Board (member from 9 May 2019)

• Tony De Domenico OAM (former Chairperson) – former Deputy Chairperson of the Board (member until 18 March 2019)

AUDIT AND RISK COMMITTEE

INVESTMENT COMMITTEE

PEOPLE, CULTURE AND REMUNERATION COMMITTEE

COMMITTEE MEMBER

ELIGIBLE TO ATTEND ATTENDED

ELIGIBLE TO ATTEND ATTENDED

ELIGIBLE TO ATTEND ATTENDED NOTE

Natalie MacDonald 4 4

James MacKenzie 4 4 3 3 3 3IC observer from 6 September 2018 to 8 May 2019; reappointed IC Member effective 9 May 2019

Tony De Domenico OAM 3 3 5 5 3 3 Resigned as Member of all three Board Committees, effective 18 March 2019

Tamara Brezzi 3 3 Resigned as ARC Member, effective 1 May 2019

Megan Haas 1 1 Appointed as ARC Member, effective 14 May 2019

Rebecca Casson 3 3 Appointed as Chairperson of PCRC, effective 9 May 2019

Graeme Parton 7 7 Appointed as Acting Deputy Chairperson and PCRC Member, effective 9 May 2019

Justin Hanney 3 3 Resigned as IC Member, effective 29 November 2018

Christine Wyatt 5 4 Tenure as IC Member expired 1 March 2019

Lou Farinotti 6 6 IC observer from 2 August 2018; appointed IC Member, effective 28 August 2018

Jacqui Walters 2 2 Appointed as IC Member, effective 14 May 2019

DEVELOPMENT VICTORIA COMMITTEE MEMBERSHIP AND ATTENDANCE 1 JULY 2018 TO 30 JUNE 2019


CHIEF EXECUTIVE OFFICER, ANGELA SKANDARAJAHThe Chief Executive Officer (CEO) has overall responsibility for leading and managing the organisation, including performance excellence, financial management, workplace safety, ensuring good practice and governance, the wellbeing of staff and the health of the organisation’s culture. The CEO also advises the Board on governance and performance matters. With over 20 years’ experience in the real estate sector, Angela has broad commercial property experience with particular expertise in property development, urban renewal and infrastructure projects. The former head of Minter Ellison’s National Real Estate, Environment and Planning team, Angela has acted for both public and private sector clients in high-profile property and infrastructure projects. Angela is a member of the Board of Advisors for a number of not for profit organisations supporting homelessness and housing affordability and has been a long-term contributor to Property Council of Australia and Law Council of Australia committees.

GROUP HEAD, STRATEGY AND CIVIC INFRASTRUCTURE, TOM CONSIDINETom leads Development Victoria’s infrastructure development and delivery business. The group is responsible for managing major projects on behalf of government clients and operates through the whole project lifecycle, from strategy and conception, through to commissioning. Tom is an experienced executive having held a number of roles within the Victorian, Commonwealth and UK public sectors and served as Chief of Staff to the Victorian Treasurer from 2014 to 2016. He has extensive skills and experience in infrastructure policy, major project feasibly, development and delivery. He has led the origination and development of some of Victoria’s largest infrastructure projects and transactions including the Level Crossing Removal Program and the long-term lease of the Port of Melbourne.

GROUP HEAD, OPERATIONS, MANNY BIKAKISManny leads Development Victoria’s Operations Group, which includes Accounting & Control, Financial Planning & Analysis, Human Resources, Health, Safety & Environment, ICT & Facilities, Risk Management and Sales & Settlements. He has a wealth of experience in senior finance, commercial & operational roles in Australia, Germany and the UK. Most recently, Manny held the position of ANZ Finance Director for PPG Industries, a Global Coatings Company, where he was a member of the Board and the Executive Team and accountable for all Finance, IT, Logistics and Commercial services across Australasia. Prior to this, Manny held senior executive positions, including CFO of Incitec Pivot’s Fertiliser business, and various senior finance, commercial and customer roles with BP internationally, including CFO of BP’s retail business in Australia & New Zealand.

GROUP HEAD, PRECINCTS, GEOFF WARDGeoff has more than 30 years’ experience in planning and delivering precinct, civic and infrastructure projects. Geoff’s team leads the long-term urban renewal of some of the State’s priority precincts. The Group provides advice to support strategic planning, undertakes master planning, and provides delivery advice to balance policy and commercial outcomes. He has broad local and international experience within the private sector and government organisations. Most recently, Geoff led the Fishermans Bend Taskforce and was responsible for the strategic planning of one of Australia’s largest urban renewal precincts. Prior to that he spent a decade in the Middle East delivering a range of major precinct projects.

GROUP HEAD, PROPERTY DEVELOPMENT, NEIL ANDERSON Neil leads the team responsible for land and property development of surplus and under-utilised government land to deliver social and economic benefits for Victorians. The Group provides technical and commercial advice, develops residential and mixed-use projects, and leads Development Victoria’s affordable housing initiatives. Neil possesses strong business leadership, joint-venture and property development experience across residential, retail and mixed-use projects. Neil also has a depth of commercial, financial and feasibility expertise developed through his background in property advisory. Prior to his commencement at Development Victoria, Neil was the General Manager of Burbank Developments and has previously held senior positions at Devine and Urban Pacific.

EXECUTIVE LEADERSHIP TEAM


REPORT ON OPERATIONS

FINANCIAL SUMMARYFor the 12 months ended 30 June 2019, Development Victoria produced an underlying Net Result from Transactions after Income Tax equivalent expense of $36.3m. After economic flows/accounting adjustments, the comprehensive profit result was $29.0 million.

Total equity of Development Victoria as at 30 June 2019 was $180.9 million.

The Net Cash Flow from Operating activities for the 12-month period ending 30 June 2019 was $71.1 million.

PERIOD ENDED 30 JUNE2019

$’0002018

$’000

Operating results

Income 206,870 270,419

Expenses (170,553) (239,784)

Income tax equivalent - -

Net result from transactions 36,317 30,635

Other economic flows (7,348) 44,673

Comprehensive result 28,969 75,308

Balance Sheet

Total assets 899,715 857,212

Total liabilities (718,800) (695,955)

Total equity 180,915 161,257

Cash Flow Statement

Total Receipts 492,217 531,264

Total Payments (421,079) (821,559)

Net cash flows from operating activities 71,138 (290,295)


PROJECT LIST 2018-19

PROJECT LOCATION

MAP No. CIVIC

1 Ballarat Offsite Storage Module 2 Ballarat

2 Flinders Street Station Administration Building Melbourne

3 Geelong Arts Centre – Stage 2 Geelong

4 Geelong Arts Centre – Stage 3 Geelong

5 Melbourne Arts Precinct Transformation Southbank

6 Melbourne Park Redevelopment – Stage 2 Melbourne

7 Melbourne Park Redevelopment – Stage 3 Melbourne

8 State Basketball Centre Knox

9 State Library Victoria Melbourne

10 State Netball and Hockey Centre Parkville

PROJECT LOCATION

MAP No. PRECINCTS

11 Docklands Docklands

12 General Motors Holden (GMH) Precinct Fishermans Bend

13 Junction Place Wodonga

14 Revitalising Central Dandenong Dandenong

PROJECT LOCATION

MAP No. PROPERTY DEVELOPMENT

15 Alfie at Altona North Altona North

16 Aurora Epping

17 Aurora Town Centre Epping North

18 Avondale Heights Avondale Heights

19 Ballarat GovHub Ballarat

20 Ballarat West Employment Zone (BWEZ) Ballarat

21 Bendigo GovHub Bendigo

22 Cairnlea Cairnlea

23 CIRQ Point Cook Point Cook

24 Fitzroy Gasworks Fitzroy North

25 DHHS Markham Ashburton

26 Ivanhoe Water Tank Ivanhoe

27 Jacksons Hill Sunbury

28 Keilor Park Keilor Park

29 Kew Residential Services Redevelopment Kew

30 Knoxfield Knox

31 Logis Dandenong

32 Officer Officer

33 Parkville Gardens Parkville

34 Riverwalk Werribee

35 Springvale South Springvale

36 Sunshine North Sunshine North

37 Stony Creek Sunshine North

38 Sydney Road Coburg

39 Taylors Lakes Taylors Lakes

40 Twelve Apostles Port Campbell

41 Valley Lake Keilor East


GEELONG

BALLARAT

19

43

201

PRECINCTS

CIVIC

PROPERTY

PROJECT LOCATIONS

MELBOURNE

PORT PHILLIP

BAY

MELBOURNE

MORNINGTON

27

1637

41

36

35

25

23

18 38

32

22

29

28

14

30

15

17

VIC WODONGA13

40

21

8

10

24

2

5

6

7

9

33

11

12

31

34

39

26


OUR PEOPLEAt its core, Development Victoria’s workplace fosters a spirit of purposeful collaboration in pursuit of delivering the highest quality services and project outcomes. Contribution is valued from a diverse range of viewpoints and is strengthened by our gender-balanced workforce overseen by a gender-balanced Board. In striving for excellence, employees are encouraged to prioritise their continued development through a wide variety of professional experiences and learning opportunities.

Sharing knowledge and expertise is hard-wired into Development Victoria’s culture and it is widely recognised that the continued growth of the organisation’s strengths and capabilities is innately reflective of its people. To further its commitment towards building capability, in the last year, Development Victoria has designed and launched a new capability framework. This framework seeks to best align career development opportunities with organisational needs and priorities, enabling employees to accelerate their growth, in turn optimising performance across all levels of Development Victoria. Purposeful leadership has been a fundamental focus, with a variety of activities and learning opportunities offered to all employees to enhance capability.

EMPLOYMENT AND CONDUCT

As a public agency, Development Victoria adheres to the Code of Conduct for Victorian Public Sector Employees.

The Victorian Public Sector Employment Principles, which provide for fair and reasonable treatment, merit in employment, equal employment opportunity, and reasonable avenues of redress, provided guidance for Development Victoria’s employment policies and practices.

WE ARE STRONG AS A TEAM

WE EMBRACE PARTNERSHIPS

WE ARE PASSIONATE

COLLABORATE

WE FIND NEW WAYS

WE STRIVE TO BE BETTER

WE ARE EMPOWERED TO GROW AND ADAPT

INNOVATE

WE FIND COMPLETE SOLUTIONS

WE ADD VALUE

WE ARE ALL ACCOUNTABLE

DELIVER

OUR VALUES


OCCUPATIONAL HEALTH AND SAFETY (OHS)

Development Victoria’s commitment to providing a healthy and safe working environment for employees, consultants, contractors and the wider community continues to be a key priority. This was underpinned by the continuous improvement of the Occupational Health and Safety Framework and increased engagement on Occupational Health and Safety (OHS) throughout the organisation.

To foster a proactive reporting culture that demonstrates a commitment to and delivery of a no-blame approach, Development Victoria has recently updated its Incident Management procedures. A total of 49 incidents were reported for the reporting period.

An analysis of the data shows that of all incidents, 18 per cent, (nine) resulted in an injury. 26 per cent, (13) of the reports proactively identified hazards, potentially eliminating the occurrence of an incident. Near misses accounted for 12 per cent (six), while damage to property totalled 23 per cent (11) of the incidents reported. The number of environmental incidents recorded for the period amounted to 10 per cent (five). Five incidents were categorised as Other.

As part of advocating and supporting workplace wellbeing, Development Victoria delivered a range of health and wellbeing programs to its employees including health checks, a mindfulness program, and fitness classes. Other initiatives include fresh fruit delivered twice a week, ergonomic assessments and workplace inspections to identify hazards and address risks.

As part of a renewed focus on safety in the workplace, a competition was held for a new workplace safety campaign. More than 50 submissions received and the winning phrase “DV - Developing Safely” (pictured right) was chosen.

This has now been incorporated into the safety management system and is being used on all safety materials to help improve workplace safety.

SAFETY PLAN

POLICIES, PROCEDURESAND PROCESS

SUPERVISION

MON

ITOR

ING

REPORTING

TRAINING &

INDUCTION

D VDEVELOPING

SAFELY


30-JUN-19

All employees Ongoing Fixed Term

Headcount FTE Full-time Headcount Part-time Headcount FTE Headcount FTE

Gender:

Male 96 94.9 89 2 90.7 5 4.2

Female 103 96.5 83 11 89.7 9 6.8

Self-described 0 0.0 0 0 0.0 0 0.0

Total 199 191.4 172 13 180.4 14 11.0

Age

Under 25 12 9.4 7 7.0 5 2.4

25-34 64 63.2 56 2 57.2 6 6.0

35-44 73 70.4 63 8 68.4 2 2.0

45-54 37 35.8 33 3 35.2 1 0.6

55-64 11 10.6 11 10.6

Over 64 2 2.0 2 2.0

Total 199 191.4 172 13 180.4 14 11.0

Classification

Level 1 14 11.0 8 8.0 6 3.0

Level 2 46 44.7 38 3 39.7 5 5.0

Level 3 45 44.3 42 2 43.3 1 1.0

Level 4 14 13.4 11 2 12.4 1 1.0

Level 5 45 43.2 39 5 42.2 1 1.0

Executive 35 34.8 34 1 34.8

Total 199 191.4 172 13 180.4 14 11.0

WORKFORCE DATAFigure 1 Details of employment levels as at 30 June 2019


LOCAL JOBS FIRST – VICTORIA INDUSTRY PARTICIPATION POLICY (VIPP)The Local Jobs First Act 2003 introduced in August 2018 brings together the Victorian Industry Participation Policy (VIPP) and the Major Projects Skills Guarantee (MPSG) which were previously administered separately. The Local Jobs First Agency Guidelines published by the Department of Economic Development, Jobs, Transport and Resources (DEDJTR) in late 2018 also clarified that departments and public sector bodies, including Development Victoria, are required to apply the Local Jobs First policy in all projects valued at $3 million or more in Metropolitan Melbourne or for state-wide projects, or $1 million or more for projects in regional Victoria.

Development Victoria has made considerable progress in implementing the Local Jobs First Policy through the use of standard form procurement templates and standard form contracts which incorporate the Local Jobs First model clauses and instructions for bidders to submit their Local Industry Development Plans (LIDP) to the Industry Capability Network (ICN). Evaluation teams apply the Local Jobs First Policy weightings on all procurements as these have been incorporated as mandatory criteria in the standard form evaluation matrices.

• Two Local Jobs First projects (one Local Jobs First Strategic Project and one Local Jobs First Standard Project), with a total value of $129,225,000 commenced, in the reporting period to which a VIPP Plan (1 July 2018 to 15 August 2018) or an LIDP (16 August 2018 to 30 June 2019) was required.

• There were 14 Local Jobs First projects in progress for which a VIPP Plan (1 July 2018 to 15 August 2018) or an LIDP (16 August 2018 to 30 June 2019) was required during the reporting period. Of these projects, 39 small or medium enterprises were directly engaged by Development Victoria as consultants or contractors.

• There is one project where the Major Projects Skills Guarantee has been applied.

No grants were provided during the reporting period.

OTHER DISCLOSURES


COMPLIANCEGOVERNMENT ADVERTISING EXPENDITUREDevelopment Victoria undertook two advertising campaigns with a total media spend of $100,000 or greater (exclusive of GST) during the reporting period.

Details of government advertising expenditure (campaign with a media spend of $100,000 or greater):

CONSULTANT PURPOSE EXPENDITURE (Ex GST)

Calibre Professional Services Pty Ltd Feasibility studies and advice $19,550

CBRE Pty Ltd Market research projects $99,250

Ernst & Young Feasibility studies, professional services and advice $86,382

GHD Pty Ltd Professional services and advice $10,880

Holding Redlich Professional services and advice $13,200

John Bahoric Design Studio Pty Ltd Professional services and advice $20,000

Minter Ellison Professional services and advice $101,781

PricewaterhouseCoopers Professional services and advice $284,535

SGS Economics & Planning Pty Ltd Professional services and advice $20,000

Urbis Pty Ltd Professional services and advice $48,248

TOTAL $703,825

CONSULTANCY EXPENDITURE

DETAILS OF CONSULTANCIES VALUED AT $10,000 OR GREATERFor the reporting period, there were seven consultancies where the total fees payable to the consultants were $10,000 or greater. The total expenditure incurred during the reporting period in relation to these consultancies is $259,575 (excluding GST). Details of individual consultancies are outlined below. All consultancies were completed within the relevant approved project fee and as at the date of this report it is not proposed to incur further expenditure on these consultancies.

DETAILS OF CONSULTANCIES UNDER $10,000 For the 12-month reporting period from 1 July 2018 to 30 June 2019, there were 12 consultancy engagements where the total fees payable for each consultancy was less than $10,000.

The total expenditure incurred during the reporting period in relation to these consultancies was $55,842 (excluding GST).

CAMPAIGN NAME CAMPAIGN SUMMARY START

DATEEND DATE

ADVERTISING (MEDIA)EXPENDITURE 2018-19

CREATIVE AND CAMPAIGNDEVELOPMENT EXPENDITURE 2018-19

RESEARCH AND EVALUATION EXPENDITURE 2018-19

Riverwalk, Werribee

Riverwalk is a land development in Werribee. Marketing activity, including advertising, was undertaken to drive property sales.

July 2018

Will continue into 2019-20 $155,178 $578,613 $2,100.00

Alfie, Altona North

Alfie is a townhouse development in Altona North. Marketing activity, including advertising, was undertaken to drive property sales.

July 2018

Will continue into 2019-20 $129,915 $657,114

Costs included in campaign

development


INFORMATION AND COMMUNICATION TECHNOLOGY EXPENDITURE For the 2018-19 reporting period, Development Victoria had a total ICT expenditure of $3.7 million, with the details shown below.

All operational ICT expenditure ICT expenditure related projects to create or enhance ICT capabilities

Business As Usual (BAU) ICT expenditure (Total)

Non-Business As Usual (Non-BAU) ICT expenditure

Operational expenditure

Capital expenditure

$3,335 $391 $141 $250

($ THOUSAND)

ICT expenditure refers to Development Victoria’s costs in providing business-enabling ICT services. This figure comprises Business As Usual (BAU) ICT expenditure and Non-Business As Usual (Non-BAU) ICT expenditure.

Non-BAU ICT expenditure relates to projects that extend or enhance Development Victoria’s current ICT offering. BAU ICT expenditure represents all remaining ICT expenditure which primarily relates to ongoing activities to operate and maintain the current ICT capability.

FREEDOM OF INFORMATION (FOI) The Freedom of Information Act 1982 allows the public a right of access to documents held by Development Victoria. The purpose of the Act is to extend as far as possible the right of the community to access information held by government departments, local councils, Ministers and other bodies subject to the Act.

An applicant has a right to apply for access to documents held by Development Victoria. This comprises documents both created by Development Victoria or supplied to Development Victoria by an external organisation or individual, and may also include maps, films, microfiche, photographs, computer printouts, computer discs, tape recordings and videotapes. Information about the type of material handled by Development Victoria is available on Development Victoria’s website under its Part II Information Statement.

The Act allows Development Victoria to refuse access, either fully or partially, to certain documents or information. Examples of documents that may not be accessed include: cabinet documents; some internal working documents; law enforcement documents; documents covered by legal professional privilege, such as legal advice; personal information about other people; and information provided to Development Victoria in confidence.

From 1 September 2017, the Act has been amended to reduce the Freedom of Information (FOI) processing time for requests received from 45 to 30 days. However, when external consultation is required the processing time automatically reverts to 45 days. Processing time may also be extended by periods of 30 days, in consultation with the applicant. With the applicant’s agreement this may occur any number of times.

If an applicant is not satisfied by a decision made by Development Victoria, under section 49A of the Act, they have the right to seek a review by the Office of the Victorian Information Commissioner (OVIC) within 28 days of receiving a decision letter.

MAKING A REQUEST Requests for access to documents must be made in writing to: Freedom of Information Officer Development Victoria GPO Box 2428 Melbourne VIC 3001

When making an FOI request, applicants should ensure requests are in writing and clearly identify what types of material/documents are being sought. An application fee of $29.60 applies (which may be waived in certain circumstances). Access charges may also be payable (for example, photocopying and search and retrieval charges).

FOI STATISTICS/TIMELINESFor the reporting period, Development Victoria received eight requests (of which one had been transferred by Development Victoria to another agency).

Of the eight requests received by Development Victoria, three were from the media, one was from a Member of Parliament and the remainder were from the general public.

Decision on FOI requests in 2018-19

Access granted in full 1

Access granted in part 0

Access refused 4

Documents not located/do not exist 0

Transferred to another agency 1

Other 2


Two decisions were made within the extended statutory 30-45 day time period; one decision within 46 to 90 days; and two decisions in greater than 90 days. In two other instances, the request did not proceed as the applicants did not respond to clarification and/or consultation requests from Development Victoria.

The average time taken to finalise requests during the reporting period was 85 days. During the reporting period, two requests were subject to a compliant/internal review by OVIC. As at 30 June 2019, both requests are still under internal review, but the complaint has been closed.

FURTHER INFORMATIONFurther information regarding the operation and scope of FOI can be obtained from the Act; regulations made under the Act; and www.foi.vic.gov.au.

COMPLIANCE WITH THE BUILDING ACT 1993The buildings occupied by the staff of Development Victoria comply with the building and maintenance provisions of the Building Act 1993. All new buildings and works to existing buildings carried out for or on behalf of Development Victoria also comply with the Building Act 1993.

COMPETITIVE NEUTRALITY POLICYCompetitive neutrality requires government businesses to ensure where services compete, or potentially compete with the private sector, any advantage arising solely from their government ownership be removed if it is not in the public interest. Government businesses are required to cost and price these services as if they were privately owned. Competitive neutrality policy supports fair competition between public and private businesses and provides government businesses with a tool to enhance decisions on resource allocation. This policy does not override other policy objectives of government and focuses on efficiency in the provision of service.

In accordance with its governing Act, Development Victoria carried out its functions using commercial disciplines. The National Competition Policy required Development Victoria to act within a competitively neutral framework. This means that, except in respect of declared projects, and other than by having access to the list of surplus government sites published by the Department of Treasury and Finance, Development Victoria:

• Operated in a competitive environment in an open market;

• Operated under the provisions of the Financial Management Act 1994, rather than the Corporations Act 2001;

• Was subject to State and Commonwealth regulations applying to private sector organisations;

• Was subject to State and Commonwealth taxes, including compliance with the National Tax Equivalent Regime; and

• Was subject to all local government rates and charges or statutory equivalents.

- Where the government decided that a commercial approach was not appropriate for a specific project, special provisions existed. The Development Victoria Act 2003 provided for the Governor in Council, on the recommendation of the Minister, to declare a development, or proposed development, to be a declared project.

- Once established as such, Development Victoria exercised particular powers to facilitate the development of the declared projects.

COMPLIANCE WITH THE PROTECTED DISCLOSURE ACT 2012The Protected Disclosures Act 2012 encourages and assists people in making disclosures of improper conduct by public officers and public bodies. The Act provides protection to people who make disclosures in accordance with the Act and establishes a system for the matters to be disclosed and rectifying action to be taken.

Development Victoria does not tolerate improper conduct by its employees or officers or the taking of reprisals against those who come forward to disclose such conduct. The organisation is committed to ensuring transparency and accountability in its administrative and management practices and supports the making of disclosures that reveal corrupt conduct, conduct involving a substantial mismanagement of public resources, or conduct involving a substantial risk to public health and safety or the environment.

Development Victoria will take all reasonable steps to protect people who make such disclosures from any detrimental action in reprisal for making the disclosure. Development Victoria will afford natural justice to the person who is the subject of the disclosure to the extent it is legally possible.


REPORTING PROCEDURESDisclosures of improper conduct or detrimental action by Development Victoria or any of its employees or officers must be made to the Independent Broad-based Anti-corruption Commission (IBAC):

Independent Broad-based Anti-corruption Commission Level 1, North Tower 459 Collins Street Melbourne Vic 3000 GPO Box 24234, Melbourne, VIC 3001 Telephone: 1300 735 135 Website: www.ibac.vic.gov.au.

The Protected Disclosures Policy and Procedures, which outline the procedures for the reporting of disclosures to the IBAC, are available on Development Victoria’s website.

COMPLIANCE WITH CARERS RECOGNITION ACT 2012Development Victoria takes all practical measures to comply with its obligations under the Act.

These include:

• Incorporating a requirement for all employees to engage in discussions during their quarterly performance check-ins with their manager about workplace flexibility;

• Providing every employee with 4G enabled laptops and tablet devices, delivering physical flexibility in relation to working locations, which gives employees greater control over how they perform their roles.

• Celebrating significant dates on the annual calendar, such as International Women’s Day, whereby we share examples of people of all genders from across the organisation who utilise flexible working practices to balance their caring responsibilities;

• Undertaking surveys periodically to understand any potential issues or barriers that may exist in relation to matters pertaining to carer responsibilities such as flexible work. In a survey run in March 2019, 80 per cent of respondents indicated that they had accessed flexible work arrangements (both formal and informal) over the previous 12 months;

• Over the last five years, 95 per cent of employees who have taken parental leave, have returned to work, most initially in a part-time capacity;

• Results from the 2019 People Matter Survey indicating that 87 per cent of employees are confident that a request for flexible work arrangement would be given due consideration. This measure saw a 17 per cent uplift from the previous year’s survey.

COMPLIANCE WITH THE DISABILITY ACT 2006Development Victoria has taken steps to affirm its position as an employer who values the rights of people with a disability.

This includes:

• Delivering compulsory workplace behaviour training during August and September 2018 that emphasised human rights and provided a refresher on anti-discrimination legislation and employer obligations;

• Participating in International Day of People with Disability in December 2018 which included providing work experience to a candidate who identified as a person with a disability;

• Offering Mental Health First Aider training to all employees in 2018 to better equip our people to provide support to others who experience mental health issues in the workplace;

• Undertaking an employee survey in relation to diversity in 2019 that indicated that six per cent of our workforce identify as a person with a disability;

• Results from the 2019 People Matter Survey indicating that the majority of employees believe there is a positive culture within the organisation in relation to employees with disabilities. This measure saw a 20% uplift from the previous year’s survey.

OFFICE BASED ENVIRONMENTAL IMPACTSOver the past year Development Victoria has undertaken a number of initiatives to improve environmental performance within its office. In early 2019 a waste audit was completed indicating room for improvement, and in response new kitchen joinery was installed that clearly separates green, recycling and general waste streams with additional signage to assist staff. A follow up audit will be undertaken late 2019 to measure improvements.

In addition, Development Victoria recently completed a full service of office lighting to ensure office lights are operating efficiently and automatically turn off after work hours. At 7pm each night, all lights switch off and revert to Motion Sensor activation. If activated by movement, lights then turn off after a further three hours.

Development Victoria has also performed an audit on the digital displays in the office to ensure these operate from sensors and are not staying on after hours. Development Victoria is also working on adding visual representation of water and electrical use to digital media within the office space in order to promote staff awareness.


ADDITIONAL INFORMATION AVAILABLE UPON REQUEST

In compliance with the requirements of the Standing Directions of the Assistant Treasurer, details in respect of the items listed below have been retained by Development Victoria and are available on request, subject to the provisions of the Freedom of Information Act 1982:

• A statement that declarations of pecuniary interest have been duly completed by all relevant officers;

• Details of publications produced by Development Victoria about itself, and how these can be obtained;

• Details of changes in prices, fees, charges, rates and levies charged by Development Victoria;

• Details of overseas visits undertaken;

• A general statement on industrial relations within Development Victoria and details of time lost through industrial accidents and disputes; and

• Details of all consultancies and contractors, including consultants/contractors engaged, services provided, and expenditure committed to for each engagement.

The information can be requested from: Freedom of Information Officer Development Victoria GPO Box 2428 Melbourne VIC 3001

ADDITIONAL INFORMATION INCLUDED IN ANNUAL REPORTDetails of the following items have been included in this annual report, on the pages indicated below:

• The occupational, health and safety of employees (page 29)

• Commitment to employment and conduct principles (page 28)

• Committees of the Board of Development Victoria (page 20)

INFORMATION THAT IS NOT APPLICABLE

The following requirements were not relevant to Development Victoria for the reasons set out below:

• Details of shares held by senior officers (No shares have ever been issued in Development Victoria).

• Details of major external reviews carried out on Development Victoria (There were no major external reviews carried out on Development Victoria during the reporting period).

• Details of major research and development activities undertaken by Development Victoria (No such activities were carried out during the reporting period).

• Details of major promotional, public relations and marketing activities undertaken by Development Victoria to develop community awareness of the organisation and its services. (No such activities were undertaken during the reporting period).


ATTESTATION FOR FINANCIAL MANAGEMENT COMPLIANCE WITH MINISTERIAL STANDING DIRECTION 5.1.4 DEVELOPMENT VICTORIA FINANCIAL MANAGEMENT COMPLIANCE ATTESTATION STATEMENT

Development Victoria is required to comply with the Standing Directions 2018 under the Financial Management Act, which set the standard for financial management by Victorian Government Agencies. Development Victoria undertakes an annual internal review of its performance against these Directions, reviewed by a formal Internal Audit programme. Development Victoria has not identified any Material Compliance Deficiencies in relation to the 2018-19 compliance year.

I, James MacKenzie, Chairperson of Development Victoria, certify that Development Victoria has complied with the applicable Standing Directions under the Financial Management Act 1994 and Instructions.

James MacKenzie Chairperson Melbourne, 29 August 2019


CONTENTSComprehensive Operating Statement for the Financial Year ended 30 June 2019 39

Balance Sheet as at 30 June 2019 40

Cash Flow Statement for the Financial Year Ended 30 June 2019 41

Statement of Changes in Equity for the Financial Year Ended 30 June 2019 42

1. ABOUT THIS REPORT 43

2. FUNDING DELIVERY OF OUR SERVICES 45

3. THE COST OF DELIVERING GOODS AND SERVICES 46

4. KEY ASSETS AVAILABLE TO SUPPORT SERVICE DELIVERY 49

5. OTHER ASSETS AND LIABILITIES 53

6. HOW WE FINANCE OUR OPERATIONS 60

7. RISKS, CONTINGENCIES AND VALUATION JUDGEMENTS 63

8. OTHER DISCLOSURES 72

DEVELOPMENT VICTORIA FINANCIAL REPORT 12 MONTHS TO 30 JUNE 2019


Comprehensive Operating Statement for the financial period ended 30 June 2019

12 MONTHS TO30 JUNE 2019


NOTES $’000 $’000

Continuing Operations

Income from transactions

Land sales 2.2 196,296 254,661

Interest Income 2.3 2,373 3,055

Other income 2.4 8,201 10,316

Fair value of assets received free of charge 2.5 - 2,387

Total income from transactions 206,870 270,419

Expenses from transactions

Costs of sales 3.2 (142,458) (202,168)

Employee benefits 3.3.1 (15,931) (18,119)

Depreciation and amortisation 4.1.1 (1,740) (2,209)

Borrowing costs 3.4 (953) (1,335)

Other operating expenses 3.5 (9,471) (15,953)

Total expenses from transactions (170,553) (239,784)

Net result from transactions before income tax equivalent expense 36,317 30,635

Income tax equivalent (expense)/benefit 5.4 - -

Net result from transactions after income tax equivalent expense 36,317 30,635

Other economic flows included in net result

Net gain/(loss) on non-financial assets 8.1 (46) (1,674)

Net gain/(loss) on financial instruments 8.1 80 106

Write (off)/back of impairments of land inventory 8.1 (8,867) 47,817

Other gains/(losses) from other economic flows 8.1 1,485 (1,576)

Total other economic flows included in net result (7,348) 44,673

Net result 28,969 75,308

Comprehensive result 28,969 75,308

The accompanying notes form part of these financial statements


Balance Sheet as at 30 June 2019

30 JUNE 2019 30 JUNE 2018

NOTES $’000 $’000

Assets

Financial Assets

Cash and deposits 6.2 162,145 81,500

Receivables 5.1 52,897 55,313

Investments and other financial assets 4.3 - 17,000

Total Financial Assets 215,042 153,813

Non-financial assets

Prepayments 1,011 488

Land inventory 5.3 678,933 696,898

Property, plant and equipment 4.1 4,312 4,730

Intangible assets 4.2 417 1,283

Total non-financial Assets 684,673 703,399

Total Assets 899,716 857,212

Liabilities

Payables 5.2 155,843 117,855

Land sale deposits 5.5 25,523 26,712

Borrowings 6.1 482,305 478,943

Employee related provisions 5.6 4,244 5,211

Provisions 5.6 50,886 67,234

Total liabilities 718,800 695,955

Net assets 180,915 161,257

Equity

Contributed capital 125,765 125,765

Accumulated surplus/(deficit) 55,150 35,492

Net worth 180,915 161,257



Balance Sheet as at 30 June 2019

30 JUNE 2019 30 JUNE 2018

NOTES $’000 $’000

Assets

Financial Assets

Cash and deposits 6.2 162,145 81,500

Receivables 5.1 52,897 55,313

Investments and other financial assets 4.3 - 17,000

Total Financial Assets 215,042 153,813

Non-financial assets

Prepayments 1,011 488

Land inventory 5.3 678,933 696,898

Property, plant and equipment 4.1 4,312 4,730

Intangible assets 4.2 417 1,283

Total non-financial Assets 684,673 703,399

Total Assets 899,716 857,212

Liabilities

Payables 5.2 155,843 117,855

Land sale deposits 5.5 25,523 26,712

Borrowings 6.1 482,305 478,943

Employee related provisions 5.6 4,244 5,211

Provisions 5.6 50,886 67,234

Total liabilities 718,800 695,955

Net assets 180,915 161,257

Equity

Contributed capital 125,765 125,765

Accumulated surplus/(deficit) 55,150 35,492

Net worth 180,915 161,257


Cash Flow Statement for the financial period ended 30 June 2019



NOTES $’000 $’000

Cash flows from operating activities:

Receipts

Receipts from customers 478,282 522,934

Goods and Services Tax recovered from the ATO 11,303 5,395

Interest received 2,632 2,935

Total receipts 492,217 531,264

Payments

Payments to suppliers and employees (396,152) (454,118)

Interest and other costs of financials paid (14,096) (11,944)

Land purchases (10,831) (355,497)

Total payments (421,079) (821,559)

Net cash flows from/(used in) operating activities 6.2.1 71,138 (290,295)

Cash flows from investing activities:

Payment for cash deposits 4.3 - (17,000)

Receipts from cash deposits 4.3 17,000 -

Purchases of non-financial assets (502) (4,988)

Cash contribution towards leasehold improvements - 2,387

Net cash flows from/(used in) investing activities 16,498 (19,601)

Cash flows from financing activities:

Cash received from activities transferred in - 165,004

Contributed capital returned to the State Government of Victoria - (41,000)

Dividends paid 8.2 (9,400) (39,816)

Borrowing costs 3.4 (953) (1,335)

Proceeds from borrowings 3,362 308,543

Net cash flows from/(used in) financial activities (6,991) 391,396

Net increase/(decrease) in cash and deposits 80,645 81,500

Cash and cash equivalents at the beginning of the financial period 81,500 -

Cash and cash equivalents at the end of financial period 6.2 162,145 81,500 The accompanying notes form part of these financial statements


Statement of Changes in Equity for the financial period ended 30 June 2019

ACCUMULATED SURPLUS

CONTRIBUTIONS BY OWNER TOTAL

NOTES $'000

Balance at 1 April 2017

Administrative restructure - net assets received - 166,765 166,765

Net result for the period 75,308 - 75,308

Dividend paid 8.2 (39,816) - (39,816)

Return of capital to State Government of Victoria - (41,000) (41,000)

Balance at 30 June 2018 35,492 125,765 161,257

Change in accounting policy 8.4 89 - 89

Restated balance at 1 July 2018 35,581 125,765 161,346

Net Result for the year 28,969 - 28,969

Dividend paid 8.2 (9,400) - (9,400)

Balance at 30 June 2019 55,150 125,765 180,915



1. ABOUT THIS REPORTDevelopment Victoria (‘the Authority’) is the Victorian government’s property development agency established under an Act of Parliament and domiciled in Australia. The Authority is responsible for carrying out urban renewal projects and developing surplus government land.

The Authority’s registered office is at Level 9, 8 Exhibition Street, Melbourne, Victoria, Australia.

This report covers the 12-month period from 1 July 2018 to 30 June 2019. Comparative information is included for the 15 months ending 30 June 2018.

BASIS FOR PREPARATION These financial statements are presented in Australian dollars, the functional and presentation currency of the Authority.

These financial statements have been prepared in accordance with the historical cost convention unless a different measurement basis is specifically disclosed in the notes associated with the item measured on a different basis.

These financial statements have been prepared on a going-concern basis which assumes continuity of normal business activities and the realisation of assets and the settlement of liabilities in the ordinary course of business.

The accrual basis of accounting has been applied in the preparation of these financial statements whereby assets, liabilities, equity, income and expenses are recognised in the reporting period to which they relate, regardless of when cash is received or paid.

Judgements, estimates and assumptions are required to be made about the carrying values of assets and liabilities that are not readily apparent form other sources. The estimates and associated assumptions are based on professional judgment derived from historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates.

These estimates and associated assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and also in future periods that are affected by the revision.

Judgments and assumptions made by management in the application of Australian Accounting Standards (AAS) that have significant effect on the financial statements and estimates relate to:

• provision for employee benefits (Refer to Note 3.3.2);

• the fair value of property, plant and equipment and leasehold improvements (Refer to Note 4.1.3);

• impairment and Net Realisable Value (NRV) assessment (Refer to Note 5.3); and

• the provision for property and development related costs (Refer to Note 5.6);

Consistent with AASB 13 Fair Value Measurement, Development Victoria determines the policies and procedures for recurring fair value measurements such as property, plant and equipment and financial instruments and for non-recurring fair value measurements such as non-financial physical assets held for sale, in accordance with the requirements of AASB 13 and the relevant Financial Reporting Directions.

In addition, Development Victoria determines whether transfers have occurred between levels in the hierarchy by reassessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

The Valuer-General Victoria (VGV) is Development Victoria’s independent valuation agency.

All amounts in the financial statements for Development Victoria have been rounded to the nearest thousand dollars, unless otherwise stated. Figures in the financial statements may not equate due to rounding.

VOLUNTARY CHANGES IN ACCOUNTING POLICIES In the current year, Development Victoria has applied a voluntary change in accounting policy with regards to AASB 107 Cash Flow Statements, which has an impact on both the current and comparative period.

Development Victoria’s Civic Projects division operates to deliver major project development and delivery services to Victorian State Government clients. The division operates by receiving cash flows in advance from clients, which is then used to fund project delivery. A nominal project management fee is charged to clients to cover Development Victoria’s cost of delivering this service.

In the prior period, given the immaterial net impact on the cash flow statement, cash flows from the Civic Projects division were not included. Development Victoria undertook an assessment in the year and resolved that in order to assist users of the financial statements in understanding of the business, a revision of policy would be undertaken in 2019, and the cash flow statement for the period ended 30 June 2018 restated in 2019.

The impact on the 2018 restated Cash Flow is detailed in the following table:


GOODS AND SERVICES TAX (GST)Income, expenses and assets are recognised net of the amount of the associated GST, unless the GST incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense.

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from or payable to, the taxation authority is included with the other receivables or payables in the balance sheet.

COMPLIANCE INFORMATIONThese general-purpose financial statements have been prepared in accordance with the Financial Management Act 1994 (FMA), Financial Reporting Directions of the Assistant Treasurer and applicable Australian Accounting Standards (AAS) which include interpretations, issued by the Australian Accounting Standards Board (AASB). In particular, they are presented in a manner consistent with the requirements of AASB 1049 Whole of Government and General Government Sector Financial Reporting.

Accounting policies are selected and applied in a manner which ensures that the resulting financial information satisfies the concepts of relevance and reliability, thereby ensuring that the substance of the underlying transactions or other events reported. Accounting policies applied are disclosed in sections where the related accounting balance or financial statement matter is disclosed.

20182018

RESTATEDRESTATED

IMPACT

$'000 $’000 $'000

Receipts

Receipts from Customers 262,075 522,934 260,858

Goods and services tax recovered from the ATO 5,395 5,395 -

Interest Received 2,935 2,935 -

Total Receipts 270,405 531,264 260,858

Payments

Payments to suppliers and employees (193,259) (454,118) (260,858)

Interest and other costs of financials paid (11,944) (11,944) -

Land purchases (355,497) (355,497) -

Total Payments (560,700) (821,559) (260,858)

Net Cash flows from/(used in operating activities) (290,295) (290,295) -

Further disclosure of Development Victoria’s relationship with Victorian State Government clients, delivering major project development and delivery services, is detailed in Note 8.7 Related Parties.


2. FUNDING DELIVERY OF OUR SERVICESINTRODUCTIONThis section presents the sources and amounts of income recognised by Development Victoria and the accounting policies that are relevant for an understanding of the items recognised in the financial statements.

Structure 2.1 Summary of income that funds the delivery of our services 45

2.2 Land sales 45

2.3 Interest income 46

2.4 Other income 46

2.5 Fair value of assets received free of charge 46

All income disclosed is net of returns, allowances, duties and taxes. Income is recognised to the extent that it is probable that the economic benefits will flow to Development Victoria and the income can be reliably measured at fair value.

Development Victoria performs land development activities either as the land owner or through partnerships with other land owners or developers. Partnerships are in the form of partnering deeds, joint arrangements or development agreements, which govern contract obligations, depict the revenue and profit-sharing arrangements, and define the project governance structures.

Long term development agreements with stage-based performance obligations and payment terms are typically used for large scale precinctual land developments. The agreements commonly grant development rights over parcels of land through an initial land payment or deposit, with subsequent stage based land or revenue share payments and cost contributions for infrastructure works.

Outside of development agreements, land is transacted through land sale contracts under terms of an initial deposit and full payment on contract settlement, with any relevant revenue share distributions to partners determined on the date of settlement.

Income from land sales is recognised by Development Victoria when:

• Development Victoria has identified a contract with a customer, which has separately identifiable performance obligations;

• Development Victoria retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the land;

• the amount of income and the costs incurred or to be incurred in respect of the transaction can be reliably measured for each performance obligation; and

• Development Victoria has satisfied the contractual performance obligation. A performance obligation is deemed to be satisfied on transfer of land title, which is usually on the date of settlement. No further obligations exist after the transfer of the title.

Project management fees charged for time and materials are recognised on an accrual basis and relate mainly to infrastructure projects that Development Victoria manages on behalf of government clients.

Development Victoria has undertaken an assessment regarding the impact of AASB 15 Revenue from Contracts with Customers and identified a nil transition impact between 2018 and 2019 revenue recognition.

Interest income includes interest received on bank deposits and bank term deposits. Interest income is recognised using the effective interest method, which allocates the interest over the relevant period.

2.1 SUMMARY OF INCOME THAT FUNDS THE DELIVERY OF OUR SERVICES 2019 2018

NOTES $’000 $’000

Land sales 2.2 196,296 254,661

Interest income 2.3 2,373 3,055

Other income 2.4 8,201 10,316

Fair value of assets received free of charge 2.5 - 2,387

Total income from transactions 206,870 270,419

2.2 LAND SALES 2019 2018

$’000 $’000

Property Development Land Sales 131,171 244,136

Precinct Lands Sales 50,785 -

Project management fees 11,340 10,525

Total land sales 196,296 254,661


Property rental income is recognised on a time proportional basis and is brought to account when Development Victoria’s right to receive the rental is established.

Contributions of resources received free of charge are recognised at fair value when control is obtained over them, irrespective of whether these contributions are subject to restrictions or conditions over their use. 3. THE COST OF DELIVERING GOODS AND SERVICESINTRODUCTIONThis section presents the major components of expenditure incurred by Development Victoria in relation to operating activities during the reporting period, as well as any related obligations outstanding as at 30 June 2019.

Structure 3.1 Expenses incurred in delivery of goods and services 46

3.2 Cost of sales 46

3.3 Employee benefits expenses 47

3.3.1 Employee benefits in the comprehensive operating statement 47

3.3.2 Employee benefits in the balance sheet 47

3.3.3 Superannuation contributions 48

3.4 Borrowing cost 49

3.5 Other operating expenses 49

2.5 FAIR VALUE OF ASSETS RECEIVED FREE OF CHARGE 2019 2018

NOTES $’000 $’000

Fair value of assets received free of charge - 2,387

3.1 EXPENSES INCURRED IN DELIVERY OF GOODS AND SERVICES 2019 2018

NOTES $’000 $’000

Cost of sales 3.2 142,458 202,168

Employee benefit expenses 3.3.1 15,931 18,119

Borrowing costs 3.4 953 1,335

Other operating expenses 3.5 9,471 15,953

Total expenses incurred in delivery of goods and services 168,814 237,575

3.2 COST OF SALES 2019 2018

$’000 $’000

Cost of land sales 128,090 187,484

Salaries, wages, long service leave and on costs 14,368 14,684

Total cost of sales 142,458 202,168

2.3 INTEREST INCOME 2019 2018

$’000 $’000

Interest from bank deposits 798 297

Interest from deposits with Treasury Corporate Victoria 1,575 2,758

Total Interest from financial assets at amortised cost 2,373 3,055

Total interest income 2,373 3,055

2.4 OTHER INCOME 2019 2018

$’000 $’000

Property rental income 8,195 5,276

Other revenue 7 5,040

Total other income 8,202 10,316


Cost of sales consists of all the supplies and effort (including salary costs) incurred in purchasing, developing and getting land into a saleable condition. This includes the direct purchase and development of a lot, together with the stage and estate infrastructure and amenity works that support the sale of a lot.

Costs comprise both historical costs incurred to date, together with future estimated costs that relate to the land being sold such as future estate works.

Cost of sales are calculated and allocated to each individual lot at the time of stage release, with the same proportion of costs allocated to all lots within that stage release.

The stage release calculation takes into account the unique attributes of that stage and estimated future costs at that time. Therefore, there may be some variance between the proportional allocations of indirect estate costs between stages.

Employee benefits expenses include all costs related to employment including wages and salaries, fringe benefits tax, leave entitlements, termination payments and WorkCover premiums. Superannuation disclosed above are employer contributions to defined benefit and defined contribution superannuation plans that are paid or payable during the 12 month reporting period.

Termination benefits are payable when employment is terminated before the normal retirement date, or when an employee accepts voluntary redundancy in exchange for those benefits. Development Victoria recognises termination benefits when it is demonstrably committed to either terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal or providing termination benefits as a result of an offer made to encourage voluntary redundancy. Benefits falling due more than 12 months after the end of the reporting period are discounted to present value.

Provision is made for benefits accruing to employees in respect of wages and salaries, annual leave and long service leave (LSL) for services rendered to the reporting date and recorded as an expense during the period the services are delivered.

3.3.2 EMPLOYEE BENEFITS IN THE BALANCE SHEET 2019 2018

$’000 $’000

Current Provisions

Employee benefits - Annual leave

Unconditional and expected to be settled within 12 months 1,316 1,200

Employee benefits - Long service leave

Unconditional and expected to be settled within 12 months 468 597

Unconditional and expected to be settled after 12 months 1,261 1,892

On-costs

Unconditional and expected to be settled within 12 months 259 281

Unconditional and expected to be settled after 12 months 143 296

Total current provisions for employee benefits (Note 5.6) 3,446 4,266

Non-current provisions:

Employee benefits 716 556

On-costs 81 87

Total non-current provisions for employee benefits (Note 5.6) 797 643

Total provisions for employee benefit 4,244 4,909

3.3.1 EMPLOYEE BENEFITS IN THE COMPREHENSIVE OPERATING STATEMENT 2019 2018

NOTES $’000 $’000

Salaries and wages, annual and long service leave and on costs 13,001 15,335

Defined benefit superannuation expense 3.3.3 22 47

Defined contribution superannuation expense 3.3.3 2,599 2,271

Termination benefits 309 466

Total employee expenses 15,931 18,119

3.3 EMPLOYEE BENEFITS EXPENSES


WAGES, SALARIES AND ANNUAL LEAVE Liabilities for wages and salaries, including non-monetary benefits and annual leave are recognised in the provision for employee benefits as ‘current liabilities’, because Development Victoria does not have an unconditional right to defer settlement of these liabilities.

Depending on the expectation of the timing of settlement, liabilities for wages and salaries and annual leave are measured at:

• nominal value if Development Victoria expects to wholly settle within 12 months; or

• present value if Development Victoria does not expect to wholly settle within 12 months.

Employment on-costs such as payroll tax, workers compensation and superannuation are not employee benefits. They are disclosed separately as a component of the provision for employee benefits when the employment to which they relate has occurred.

Unconditional LSL is disclosed in the notes to the financial statements as a current liability, even where Development Victoria does not expect to settle the liability within 12 months because it will not have the unconditional right to defer the settlement of the entitlement should an employee take leave within 12 months.

The components of the current LSL liability are measured at:

• nominal value - component that is expected to be wholly settled within 12 months; and

• present value - component that is not expected to be wholly settled within 12 months.

Conditional LSL is disclosed as a non-current liability. There is an unconditional right to defer the settlement of the entitlement until the employee has completed the requisite years of service. This non-current LSL liability is measured at present value.

Any gain or loss following revaluation of the present value of non-current LSL liability is recognised as a transaction, except to the extent that a gain or loss arises due to changes in bond interest rates for which it is then recognised as an ‘other economic flow’ in the net result.

3.3.3 SUPERANNUATION CONTRIBUTIONSDevelopment Victoria employees are entitled to receive superannuation contributions and Development Victoria contributes to both defined benefit and defined contribution plans.

The defined benefit plan provides benefits based on years of service and final average salary. Employees under the Defined Benefit Scheme are entitled to defined lump-sum benefits on retirement, disability or death. The basis of determining the level of employer contributions is determined by the various actuaries of the defined benefit superannuation plan.

Development Victoria does not recognise any defined benefit liability in respect of the plan(s) because the Authority has no legal or constructive obligation to pay future benefits relating to its employees; its only obligation is to pay superannuation contributions as they fall due. Department of Treasury and Finance recognises and discloses the State’s defined benefit liabilities in its financial statements.

However, superannuation contributions paid or payable for the reporting period are included as part of employee benefits in the comprehensive income statement.

The superannuation contributions made by Development Victoria are as follows:

SUPERANNUATION CONTRIBUTIONS 2019 2018

$’000 $’000

Paid contribution for the period

Defined benefits plan 20 45

Defined contribution plans 2,381 2,111

Contribution outstanding at period end

Defined benefit plan 2 2

Defined contribution plans 218 160

Total contribution outstanding at period end 220 162


Borrowing costs include interest on short-term and long-term borrowings, in accordance with AASB 123 Borrowing Costs applicable to for-profit public sector entities.

Borrowing costs directly attributable to the acquisition or construction of a qualifying asset are capitalised to inventories. Other borrowing costs are recognised as expenses in the period in which they are incurred.

Financial accommodation levy is an additional interest charged by the Treasurer (Department of Treasury and Finance) for providing Development Victoria with access to borrowing. The levy is based on the level of borrowing and a percentage rate determined by the Treasury on an annual basis. Financial accommodation levy is capitalised to inventory when attributable to the acquisition or construction of a qualifying asset.

Operating, Marketing and Insurance expenses generally represent the day to day running costs incurred in normal operations and are recognised when they are incurred and reported in the financial period to which they relate.

Operating lease expenses are recognised as an expense in the comprehensive operating statement on a straight-line basis over the lease term. The leased asset is not recognised in the balance sheet.

4. KEY ASSETS AVAILABLE TO SUPPORT SERVICE DELIVERYINTRODUCTIONThis section presents the investments that are utilised by Development Victoria to fulfil its objectives and conduct its activities and the accounting policies that are relevant for an understanding of the items recognised in the financial statements.

Structure

4.1 Total property, plant and equipment 49

4.1.1 Depreciation and amortisation 50

4.1.2 Reconciliation of movements in carrying amount 50

4.1.3 Property plant & equipment at fair value 51

4.1.4 Reconciliation of level 3 fair value 51

4.2 Intangible assets 52

4.3 Investments and other financial assets 53

3.4 BORROWING COST 2019 2018

$’000 $’000

Interest on loans from Treasury Corporation of Victoria 12,912 9,041

Financial accommodation levy 4,461 4,238

17,373 13,279

Borrowing costs capitalised to inventories (16,420) (11,944)

Total Borrowing costs 953 1,335

3.5 OTHER OPERATING EXPENSES 2019 2018

$’000 $’000

Marketing expenses 2,052 2,178

Operating expenses 4,791 7,693

Operating lease expenses 1,797 5,033

Insurance 831 1,050

Total other operating expenses 9,471 15,953

4.1 TOTAL PROPERTY, PLANT AND EQUIPMENT 2019

$’000

GROSS CARRYING AMOUNT

ACCUMULATED DEPRECIATION

NET CARRYING AMOUNT

Plant and equipment 1,921 (1,313) 608

Leasehold improvements 5,574 (1,870) 3,704

Buildings 575 (575) -

Total Infrastructure, property, plant and equipment 8,070 (3,758) 4,312

INITIAL RECOGNITIONItems of property, plant and equipment, are measured initially at cost and subsequently, revalued at fair value less accumulated depreciation and impairment. Where an asset is acquired for no or nominal consideration, the cost is the asset’s fair value at the date of acquisition.

The cost of leasehold improvements is capitalised and depreciated over the shorter of the remaining term of the lease or their estimated useful lives.

SUBSEQUENT MEASUREMENTProperty, plant and equipment are subsequently measured at fair value less accumulated depreciation and impairment. Fair value is determined with regard to the asset’s highest and best use (considering legal or physical restrictions imposed on the asset, public announcements or commitments made in relation to the intended use of the asset).

Depreciation is provided on property, plant and equipment, including freehold buildings.

Depreciation is generally calculated on a straight-line basis, at rates that allocate the asset’s value, less any estimated residual value, over its estimated useful life. Leasehold improvements are depreciated over the period of the lease or estimated useful life, whichever is shorter, using the straight-line method.

Depreciation methods and rates used for each class of depreciable assets are:

Class of Assets Useful life Infrastructure 3 to 10 years Buildings 4 to 40 years Plant and equipment 3 to 10 years Leasehold improvements 7 to 15 years Capitalised software 5 years

The estimated useful lives, residual values and depreciation method are reviewed at the end of each annual reporting period, and adjustments made where appropriate.

Leasehold improvements are depreciated over the shorter of the lease term and their useful lives.

IMPAIRMENTNon-financial assets, including items of property, plant and equipment, are tested for impairment whenever there is an indication that the asset may be impaired.

4.1.1 DEPRECIATION AND AMORTISATION 2019 2018

Charge for the period $’000 $’000

Infrastructure - 212

Plant and equipment 291 311

Leasehold improvements 582 477

Buildings - 61

Capitalised software 867 1,148

Total cost of sales 1,740 2,209

4.1.2 RECONCILIATION OF MOVEMENTS IN CARRYING AMOUNT OF PROPERTY, PLANT AND EQUIPMENT 2019

$’000

INFRASTRUCTURE BUILDINGS PLANT AND EQUIPMENT

LEASEHOLD IMPROVEMEMTS

TOTAL

Transfers in from business combinations - - 552 4,177 4,729

Additions - - 393 109 503

Disposals - - (46) - (46)

Depreciation - - (291) (582) (873)

Carrying amount at the end of the financial period - - 608 3,704 4,312

4.1 TOTAL PROPERTY, PLANT AND EQUIPMENT 2018

$’000


ACCUMULATED DEPRECIATION

NET CARRYING AMOUNT

Plant and equipment 1,528 (976) 552

Leasehold improvements 5,465 (1,287) 4,178

Buildings 574 (574) -

Total Property, plant and equipment 7,567 (2,837) 4,730



4.1.3 PROPERTY, PLANT AND EQUIPMENT AT FAIR VALUE

Structure

The fair values of non-financial physical assets are determined as follows

Level 1 - quoted (unadjusted) market prices in active markets for identical assets or liabilities. Level 2 - valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable; and Level 3 - valuation techniques for which the lowest input that is significant to the fair value measurement is unobservable.

2019 $'000

FAIR VALUE MEASUREMENT AT END OF REPORTING PERIOD USING:


LEVEL 1 LEVEL 2 LEVEL 3

Plant and equipment 608 - - 608

Leasehold improvements 3,704 - - 3,704

Total property, plant and equipment 4,312 - - 4,312

2018 $'000

FAIR VALUE MEASUREMENT AT END OF REPORTING PERIOD USING:


LEVEL 1 LEVEL 2 LEVEL 3

Plant and equipment 552 - - 552

Leasehold improvements 4,178 - - 4,178

Total property, plant and equipment 4,730 - - 4,730

4.1.2 RECONCILIATION OF MOVEMENTS IN CARRYING AMOUNT OF PROPERTY, PLANT AND EQUIPMENT 2018

$’000

INFRASTRUCTURE BUILDINGS PLANT AND EQUIPMENT


TOTAL

Transfers in from business combinations 1,304 642 280 507 2,734

Fair value of assets received free of charge - - - 2,387 2,387

Additions - - 583 1,761 2,344

Disposals (1,092) (581) - - (1,673)

Depreciation (212) (61) (311) (477) (1,061)


4.1.4 RECONCILIATION OF LEVEL 3 FAIR VALUE 2019

$’000

OTHERINFRASTRUCTURE

BUILDINGS PLANT AND EQUIPMENT


TOTAL

Opening balance - - 552 4,177 4,729

Purchases - - 393 109 503

Disposals - - (46) - (46)

Depreciation - - (291) (582) (873)

Closing balance - - 608 3,704 4,312


2019 VALUATION TECHNIQUE

SIGNIFICANT UNOBSERVABLE INPUTS

RANGE (WEIGHTED AVERAGE)

SENSITIVITY OF FAIR VALUE MEASUREMENT TO CHANGES IN SIGNIFICANT UNOBSERVABLE INPUTS

Plant & Equipment

Current replacement cost

Useful life of plant and equipment 2 to 10 years

A significant increase or decrease in the estimated useful life of the asset would result in a significantly higher or lower valuation

Leasehold Improvements

Current replacement cost

Useful life of leasehold improvements 8 to 15 years

A significant increase or decrease in the estimated useful life of the asset would result in a significantly higher or lower valuation

4.2 INTANGIBLE ASSETS 2019 $’000

2018 $’000

SOFTWARE SOFTWARE

Gross Carrying Amount

Opening balance 4,152 -

Transfers in from business combinations - 8,540

Additions - 257

Disposals (13) (4,645)

Closing Balance 4,139 4,152

Accumulated depreciation and amortisation

Opening balance (2,869) -

Transfers in from business combinations - (6,366)

Amortisation of intangible non-produced assets (866) (1,148)

Disposals 13 4,645

Closing Balance (3,722) (2,869)

Net book value at end of the financial period 417 1,283

4.1.4 RECONCILIATION OF LEVEL 3 FAIR VALUE 2018

$’000

OTHERINFRASTRUCTURE

BUILDINGS PLANT AND EQUIPMENT


TOTAL

Transfers in from business combinations 1,304 642 280 507 2,734

Purchases - - 583 4,148 4,731

Disposals (1,092) (581) - - (1,673)

Depreciation (212) (61) (311) (477) (1,061)


Description of significant unobservable inputs to Level 3 valuations

Fair value measurement at end of reporting period using:

INITIAL RECOGNITIONWhen the recognition criteria in AASB 138 Intangible Assets are met, internally generated intangible assets are recognised at cost. Subsequently, intangible assets with finite useful lives are carried at cost less accumulated amortisation and accumulated impairment losses. Amortisation begins when the asset is available for use, that is, when it is in the location and condition necessary for it to be capable of operating in the manner intended by management.

An internally generated intangible asset arising from development is recognised if, and only if, all of the following is demonstrated:

(a) the technical feasibility of completing the intangible asset so that it will be available for use of sale;

(b) an intention to complete the intangible asset and use or sell it;

(c) the ability to use and sell the intangible asset;

(d) the intangible asset will generate probable future economic benefits;

(e) the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and

(f] the ability to measure reliably the expenditure attributable to the intangible asset during its development.


Subsequent measurement

Intangible produced assets with finite lives are amortised on a straight line basis over their useful lives. The amortisation period and amortisation method for an intangible asset with a finite useful live are reviewed at least at the end of each annual reporting period.

Intangible non-produced assets with finite lives are amortised as an ‘other economic flow’ on a straight line basis over their useful lives or 5 years, whichever is shorter.

Impairment of intangible assets

Goodwill and intangible assets with indefinite useful lives (and intangible assets not yet available for use) are tested annually for impairment and whenever there is an indication that the asset may be impaired. Intangible assets with finite useful lives are tested for impairment whenever an indication of impairment is identified.

If there is an indication of impairment, the assets concerned are tested as to whether their carrying value exceeds their possible recoverable amount. Where an asset’s carrying value exceeds its recoverable amount, the difference is written off by a charge to the Comprehensive Operating Statement.

4.3 INVESTMENTS AND OTHER FINANCIAL ASSETS

Notes: (a) Term deposits under ‘investments and other financial assets’ class include only term deposits with maturity greater than 90 days.

CURRENT INVESTMENTS AND OTHER FINANCIAL ASSETS 2019 2018

$’000 $’000

Term deposits: (a)

Australian dollar term deposits > three months - 17,000

Total current investments and other financial assets - 17,000

5. OTHER ASSETS AND LIABILITESINTRODUCTIONThis section sets out the assets and liabilities that arose from Development Victoria’s controlled operations.

Structure 5.1 Receivables 53

5.2 Payables 55

5.3 Inventories 56

5.4 Income and deferred tax 56

5.5 Land sale deposits 58

5.6 Provisions 59

5.1 RECEIVABLES 2019 2018

$’000 $’000

Contractual

Trade receivables 17,681 5,121

Provision for estimated credit loss (104) (184)

Amounts receivable under development agreements 26,156 37,173

Other receivables 3,867 600

Statutory

GST input tax credit recoverable 5,297 12,603

Total receivables 52,897 55,313

Represented by:

Current receivables 40,593 29,754

Non-current receivables 12,304 25,559

Total receivables 52,897 55,313


Receivables consist of:• contractual receivables, such as debtors in relation to the sale of land and services; and

• statutory receivables include amounts owing from Goods and Services Tax (GST) input tax credits recoverable.

Contractual receivables are classified as financial instruments and categorised as ‘receivables’ (refer to 7.1.1). They are initially recognised at fair value plus attributable transaction costs. Subsequent to initial measurement they are measured at amortised cost using the effective interest method, less any impairment.

Statutory receivables do not arise from contracts and are recognised and measured similarly to contractual receivables (except for impairment), but are not classified as financial instruments for disclosure purposes. Development Victoria applies AASB 9 for initial measurement of the statutory receivables and as a result statutory receivables are initially recognised at fair value plus any directly attributable transaction cost.

Amounts receivable under development agreements relate to revenue recognised at stage release with payment terms aligned to future project milestones as determined by the developer, and are carried at nominal amounts.

GST input tax credit recoverable is the gross amount of GST recoverable from the taxation authority and is included as part of receivables balance. AASB interpretation 1031 provides that revenue, expenses and assets must be recognised, net of the amount of GST, except where GST relating to the expenditure items is not recoverable from the taxation authority, in which case the item is recognised as GST inclusive.

Expected Credit Loss

Receivables are assessed for bad and doubtful debts on a regular basis. An expected credit loss provision for doubtful debts is recognised and reviewed annually in line with AASB 9 Financial Instruments, see note 7.1.2.

Bad debts considered as written off by mutual consent are classified as a transaction expense. Bad debts not written off, but included in expected credit loss, are classified as other economic flows included in net result.

Note: The disclosure above excludes statutory payables (e.g. amounts arising to Victorian Government and GST taxes payable).

Further analysis of Expected Credit Loss (ECL) is undertaken at Note 7.1.

There are no financial assets that had their terms renegotiated so as to prevent them from being past due or impaired, and they are stated at the carrying amounts as indicated.

AGEING ANALYSIS OF CONTRACTUAL RECEIVABLES $’000

PAST DUE BUT NOT IMPAIRED

2019 CARRYING AMOUNT

NOT PAST DUE AND NOT IMPAIRED

LESS THAN 1 MONTH

1 - 3 MONTHS 3 MONTHS - 1 YEAR

GREATER THAN 1 YEAR

EXPECTED CREDIT LOSS

Trade receivables 17,681 7,774 8,020 69 1,642 72 104

Amounts receivable under development 26,156 26,156 - - - - -

Other receivables 3,867 3,867 - - - - -Total 47,704 37,797 8,020 69 1,642 72 104

AGEING ANALYSIS OF CONTRACTUAL RECEIVABLES $’000




LESS THAN 1 MONTH


GREATER THAN 1 YEAR

IMPAIRMENT

Trade receivables 5,121 2,341 1,974 250 372 - 184

Amounts receivable under development 37,173 37,173 - - - - -

Other receivables 600 596 - - 4 - - Total 42,894 40,110 1,974 250 376 - 184

5.2 PAYABLES 2019 2018

$’000 $’000

Contractual

Trade payables 10,083 1,765

Other creditors 131,320 95,967

Accrued expenses 6,498 7,620

Deferred income 45 2,147

Total contractual payables 147,946 107,499

Statutory

Accrued expenses 7,491 4,250

Deferred income 406 6,106

Total statutory payables 7,897 10,356

Total payables 155,843 117,855

Represented by:

Current Payables 155,797 117,830

Non-current payables 46 25

Total payables 155,843 117,855

Payables consist of:

• contractual payables, such as trade payables, accrued expenses and deferred income. Trade payables are classified as financial instruments and measured at amortised cost. Accounts payable represent liabilities for goods and services provided to Development Victoria prior to the end of the financial year that are unpaid; and

• statutory payables, such as Goods and Services Tax and Fringe Benefits Tax. Statutory payables are recognised and measured similarly to contractual payables, but are not classified as financial instruments and not included in the category of financial liabilities at amortised cost, because they do not arise from contracts.

(a) Trade payables and accrued expenses

These amounts represent liabilities for goods and services provided to Development Victoria prior to the end of the financial period which remain unpaid. The amounts are unsecured and are usually paid within 30 days of recognition.

(b) Other creditors

These amounts relate to amounts payable to developers and others under development agreements on achievement of agreed milestones.

(c) Deferred income

These amounts represent income under development agreements where milestones for revenue recognition have not been met.

AGEING ANALYSIS OF CONTRACTUAL PAYABLES $’000




LESS THAN 1 MONTH


GREATER THAN 1 YEAR

Trade payables 10,083 9,737 256 88 2 -

Other creditors 131,320 131,320 - - - -

Accrued expenses 6,498 6,498 - - - -

Deferred income 45 45 - - - -

147,946 147,600 256 88 2 -

AGEING ANALYSIS OF CONTRACTUAL PAYABLES $’000




LESS THAN 1 MONTH


GREATER THAN 1 YEAR

Trade payables 1,765 - 1,765 - - -

Other creditors 95,967 76,922 - 19,045 - -

Accrued expenses 7,620 7,620 - - - -

Deferred income 2,147 2,147 - - - -

107,499 86,689 1,765 19,045 - -



Inventories include development properties, land under development (including work in progress) and undeveloped land and is valued at the lower of cost or net realisable value.

Cost includes: (a) the cost of acquiring the land and buildings; (b) land improvement costs; (c) borrowing costs directly attributable to the acquisition of land or construction of a building; and (d) other costs that can be directly attributed to the project.

Overhead allocations and salaries are not capitalised into inventory.

Net realisable value is determined on each individual project based on the expected net cash flows from the development and sale of land in the ordinary course of business, as determined in the Development Victoria Corporate Plan, discounted to their present values using a market-determined, risk adjusted rate.

The ordinary course of business delivery method and assumptions for each project are subject to changes in market conditions, policy or corporate strategy which would change the net realisable value. Where the net realisable value of a project is below the current inventory value, the difference is recognised as an impairment of land inventory and shown as Other Economic Flows in the Comprehensive Operating Statement.

A land inventory impairment can be reversed by either:

• the sale of inventory from the project. A proportional amount of impairment is released into the Comprehensive Operating Statement at the point of settlement, reducing the cost of goods sold; or

• an increase in the net realisable value at subsequent annual inventory assessments that may result in some or all of the impairment for a project being reversed.

Inventory cannot be valued higher than cost. A net realisable value assessment of inventory is therefore only to identify any impairment or reversals of previous impairments. If there is an indication that there has been a reversal in the estimate of an asset’s recoverable amount since the last impairment loss was recognised, then the impairment loss is reversed only to the extent that the carrying amount does not exceed the carrying amount that would have been determined if no impairment loss had been previously recorded.

Total Inventory includes $16.4 million borrowing costs capitalised during the period, and the write off of $8.8 million asset relating to the Revitalising Central Dandenong project, relating to a remeasurement of associated future income.

In accordance with AASB 101 Presentation of Financial Statements, land held as inventory is disclosed as a current asset even though it is not expected to be realised within 12 months.

5.3 INVENTORIES 2019 2018

$’000 $’000

Inventories

Development properties 198,976 190,843

Land under development 307,272 313,044

Undeveloped Land 172,685 193,011

Total inventories 678,933 696,898

5.4 INCOME AND DEFERRED TAXDevelopment Victoria is exempt from income tax in accordance with section 50-25 of the Income Tax Assessment Act 1997. Development Victoria is subject to the National Tax Equivalent Regime pursuant to section 88 of the State Owned Enterprises Act 1992 . Any activity relating to the Docklands area or the Revitalising Central Dandenong project is exempt from the National Tax Equivalent Regime in accordance with section 67 of the Development Victoria Act 2003.

Income tax expense represents the sum of the tax currently payable and deferred tax.

(a) Current tax

The tax currently payable is based on taxable profit for the period. Taxable profit differs from profit as reported in the Comprehensive Operating Statement because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.

(b) Deferred tax

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.


Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which Development Victoria expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. Deferred tax liabilities and assets are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities when they relate to income taxes levied by the same taxation authority and Development Victoria intends to settle its current tax assets and liabilities on a net basis.

(a) Income tax equivalent (expense)/benefit The major components of the income tax equivalent expense are:Current income tax

Current income tax charge - -Deferred income tax

Relating to origination and reversal of temporary differences - -Effect of temporary differences not recognised as deferred tax assets and liabilities - -

Income tax equivalent expense/(benefit) reported in the Comprehensive Operating Statement - -

(c) Numerical reconciliation between aggregate tax expense recognised in the comprehensive operating statement and tax expense calculated per the statutory income tax rate

2019 $’000

Accounting profit/(loss) from continuing activities before income tax equivalent expense 28,969Accounting profit/(loss) from ordinary activities subject to income tax equivalent expense 11,365

Prima facie income tax calculated at 30% 3,410Effect of tax losses not recognised as deferred tax assets -Effect of temporary differences not recognised as deferred tax assets and liabilities (3,410)

Aggregate income tax equivalent expense/(benefit) -

(b) Amounts charged or credited directly to equityNo deferred income tax related items were charged directly to equity.

(e) Unrecognised deferred tax assets

Unused tax losses for which no deferred tax assets have been recognised are $26,332,000.

2019 $’000

2019 $’000

(d) Recognised deferred tax assets and liabilities Current income tax Deferred income taxOpening balance - -Charged to income - -Other payment - -

Closing balance - -

Tax equivalent expense in the Comprehensive Operating StatementAmounts recognised in the balance sheet: -

Current tax assets -Current tax liabilities -Deferred tax asset 10,767Deferred tax liability (10,767)

-


5.5 LAND SALE DEPOSITS 2019 2018

$’000 $’000

Land sale deposits 25,523 26,712

Total land sale deposits 25,523 26,712

Represented by:

Current payables 3,005 1,486

Non-current payables 22,518 25,226

Total land sale deposits 25,523 26,712

Development Victoria has two distinct types of land sales, precinct land sales and residential land sales.

For precinct land sales, land sale deposits represent non-interest bearing deposits received for land sales and associated trunk infrastructure from developers in accordance with their relevant precinct development agreements. Upon the associated stage release of part or all of a precinct these amounts are subsequently recognised as income.

For residential land sales, these amounts represent non-interest bearing deposits and are recognised as revenue once the land is settled and when the risks and rewards of ownership no longer lie with Development Victoria and Development Victoria has no continuing managerial involvement in the land to the degree usually associated with ownership.

(a) Income tax equivalent (expense)/benefit The major components of the income tax equivalent expense are:Current income tax

Current income tax charge - -Deferred income tax

Relating to origination and reversal of temporary differences - -Effect of temporary differences not recognised as deferred tax assets and liabilities - -

Income tax equivalent expense/(benefit) reported in the Comprehensive Operating Statement - -

(c) Numerical reconciliation between aggregate tax expense recognised in the comprehensive operating statement and tax expense calculated per the statutory income tax rate

2018 $’000

Accounting profit/(loss) from continuing activities before income tax equivalent expense 75,308Accounting profit/(loss) from ordinary activities subject to income tax equivalent expense 42,763

Prima facie income tax calculated at 30% 12,829Effect of tax losses not recognised as deferred tax assets -Effect of temporary differences not recognised as deferred tax assets and liabilities (12,829)

Aggregate income tax equivalent expense/(benefit) -

(b) Amounts charged or credited directly to equityNo deferred income tax related items were charged directly to equity.

(e) Unrecognised deferred tax assets

Unused tax losses for which no deferred tax assets have been recognised are $29,742,000.

2018 $’000

2018 $’000

(d) Recognised deferred tax assets and liabilities Current income tax Deferred income taxOpening balance - -Charged to income - -Other payment - -Closing balance - -

Tax equivalent expense in the Comprehensive Operating StatementAmounts recognised in the balance sheet:

Current tax assets -Current tax liabilities -Deferred tax asset 9,676Deferred tax liability (9,676)

-


5.6 PROVISIONS 2019 2018

$’000 $’000

Current provisions

Property and development related costs (a) 17,021 33,337

Onerous contracts (b) - 469

Employee benefits 3,447 4,266

Employee restructuring - 302

Other provisions 3,900 3,900

Total current provisions 24,368 42,274

Non-current provisions

Property and development related costs (a) 29,442 29,005

Other provision 523 523

Employee benefits 797 643

Total non-current provisions 30,762 30,171

Total provisions 55,130 72,445

Employee related provisions 4,244 5,211

Provisions 50,886 67,234

(a) Property and development related costs relate to present obligations to carry out future development works under relevant planning permits or development agreements. The property and development related costs of $46.5 million relates to Docklands infrastructure of $30.7 million and development project portfolio of $15.7 million.

(b) Onerous contracts mainly relate to a present obligation by Development Victoria to deliver infrastructure to projects where meeting the contractual obligations significantly exceed the economic benefits expected to be received.

When some or all of the economic benefits required to settle a provision are expected to be received from a third party, the receivable is recognised as an asset if it is virtually certain that recovery will be received, and the amount of the receivable can be measured reliably.

RECONCILIATION OF MOVEMENT IN PROVISIONS 2019

PROPERTY AND DEVELOPMENT RELATED COSTS

ONEROUS CONTRACTS

EMPLOYEE BENEFITS & RESTRUCTURING

OTHER PROVISIONS

$'000

Opening balance 62,342 469 5,211 4,423 72,445

Additional provisions recognised 20,952 - 1,209 - 22,161

Amounts utilised during the year (36,831) - (692) - (37,523)

Reductions resulting from remeasurement - (469) (1,485) - (1,954)

Closing balance 46,463 - 4,243 4,423 55,130


6. HOW WE FINANCE OUR OPERATIONS INTRODUCTIONThis section provides information on the sources of finance utilised by Development Victoria during its operations and other information related to financing activities of Development Victoria. This section also includes disclosures of balances that are financial instruments (such as borrowings and cash balances). Notes 7.1 and 7.2 provide additional, specific financial instrument disclosures.

Structure

6.1 Borrowings 60

6.2 Cash flow information and balances 61

6.2.1 Reconciliation of net result for the period to cash flow from operating activities 62

6.3 Leases and financial arrangements 62

6.4 Commitments for expenditure 63

6.4.1 Total commitments payable 63

Borrowings refer to interest bearing liabilities mainly raised from public borrowings raised through the Treasury Corporation of Victoria and are carried at their principal amounts.

Borrowings are classified as financial instruments. The measurement basis subsequent to initial recognition depends on whether Development Victoria has categorised its interest bearing liabilities as either ‘financial liabilities designated at fair value through profit or loss’, or financial liabilities at ‘amortised cost’. The classification depends on the nature and purpose of the interest-bearing liabilities. Development Victoria determines the classification of its interest bearing liabilities at initial recognition.

Development Victoria has designated certain financial liability at amortised cost at fair value through net result to eliminate or significantly reduce the accounting mismatch that would otherwise arise. All other interest bearing borrowings are initially recognised at the fair value of the consideration received less directly attributable transaction costs and subsequently measured at amortised cost using the effective interest method. For financial liabilities designated at fair value through net result, all transaction costs are expensed as incurred. And they are subsequently measured at fair value with changes in fair value relating to Development Victoria’s own credit risk recognised in other comprehensive income and the remaining amount of changes in fair value recognised in net result. Amounts in other comprehensive income related to credit risk are not subject to recycling in profit loss but are transferred to retained earnings when realised.

Defaults and breaches: During the financial period, there were no defaults or breaches on any of the loans.

All interest bearing borrowings are initially recognised at the fair value of the consideration received less directly attributable transaction costs and subsequently measured at amortised cost using the effective interest method. For financial liabilities designated at fair value through net result, all transaction costs are expensed as incurred, and subsequently measured at fair value with changes in fair value relating to Development Victoria’s own credit risk recognised in other comprehensive income and the remaining amount of changes in fair value recognised in net result. Amounts in other comprehensive income related to credit risk are not subject to recycling in profit loss but are transferred to retained earnings when realised.

All interest bearing liabilities are initially recognised at the fair value of the consideration received, less directly attributable transaction costs. The measurement basis subsequent to initial recognition depends on whether Development Victoria has categorised its interest bearing liabilities as financial liabilities at amortised cost. Any difference between the initial recognised amount and the redemption value is recognised in net result over the period of the borrowing using the effective interest method.

6.1 BORROWINGS 2019 2018

$’000 $’000

Current borrowings

Loans from Treasury Corporation of Victoria 128,805 187,543

Total current borrowings 128,805 187,543

Non-current borrowings

Loans from Treasury Corporation of Victoria 353,500 291,400

Total non-current borrowings 353,500 291,400

Total borrowings 482,305 478,943


MATURITY ANALYSIS OF BORROWINGS

2019 MATURITY DATES

CARRYING AMOUNT

NOMINAL AMOUNT

LESS THAN 1 MONTH

1-3 MONTHS

3 MONTHS - 1 YEAR

1- 5YEARS

5+ YEARS

Loans from TCV 482,305 482,305 45,905 35,000 47,900 310,000 43,500

Total 482,305 482,305 45,905 35,000 47,900 310,000 43,500

MATURITY ANALYSIS OF BORROWINGS

2018 MATURITY DATES

CARRYING AMOUNT

NOMINAL AMOUNT

LESS THAN 1 MONTH

1-3 MONTHS

3 MONTHS - 1 YEAR

1- 5YEARS

5+ YEARS

Loans from TCV 478,943 478,943 167,543 20,000 - 227,900 63,500

Total 478,943 478,943 167,543 20,000 - 227,900 63,500

INTEREST EXPENSE INCLUDING CAPITALISED BORROWING COST 2019 2018

$’000 $’000

Interest on government loans 17,373 13,279

Total interest expense 17,373 13,279

Interest expense includes costs incurred in connection with the borrowing of funds which includes interest on bank overdrafts, and short term and long term borrowings.

Interest expense is recognised in the period in which it is incurred.

6.2 CASH FLOW INFORMATION AND BALANCES

Cash and deposits comprise cash on hand and cash at bank, deposits at call and those highly liquid investments with an original maturity of three months or less, which are held for the purpose of meeting short term cash commitments rather than for investment purposes, and which are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value.

2019 2018

Cash at bank and on hand 162,145 4,852

Deposits at call Treasury Corporation of Victoria - 76,648

Cash and cash equivalents 162,145 81,500


6.2.1 RECONCILIATION OF NET RESULT FOR THE PERIOD TO CASH FLOW FROM OPERATING ACTIVITIES 2019 2018

$’000 $’000

Net result for the period 28,969 75,308

Non-cash movements:

Depreciation and amortisation of non-current assets 1,740 2,209

Assets provided free of charge - (2,387)

(Gain)/loss on disposal of non-current assets 46 1,674

Remeasurement of inventory 8,867 -

Write-back of previous impairments of inventory - (47,817)

Provision for doubtful debts (80) (106)

(Gain)/loss arising from revaluation of long service liability (1,485) 1,576

Movements included in investing and financing activities:

Borrowing costs expensed not relating to operating activities 953 1,335

Movements in assets and liabilities:

(Increase)/decrease in receivables 2,584 (8,045)

(Increase)/decrease in inventories 9,099 (310,748)

(Increase)/decrease in other non-financial assets (524) 14

Increase/(decrease) in payables 37,988 91,545

Increase/(decrease in provisions (15,830) (38,161)

Increase/(decrease) in other liabilities (1,189) (56,692)

Net cash flow from/(used in) operating activities 71,138 (290,295)

For cash flow statement presentation purposes, cash and cash equivalents include bank overdrafts, which are included as current borrowings on the balance sheet, as indicated in the above reconciliation.

Cash flows are included in the cash flow statement on a gross basis. The GST component of cash flows arising from investing and financing activities which is recoverable from, or payable to, the taxation authority are presented as operating cash flows.

6.3 LEASES AND FINANCIAL ARRANGEMENTS

Operating leases relate to properties owned by Development Victoria with lease terms between 1 and 20 years, with an option to extend a further 6 years. Properties are held as part of the Inventory balance, with rental revenue an incidental aspect of Development Victoria’s long term intention to develop the site. All operating lease contracts contain market review clauses in the event that the lessee exercises its option to renew. The lessee does not have an option to purchase the property at the expiry of the lease period.

2019 2018

$’000 $’000

Non-cancellable operating lease receivables

Not longer than one year 9,384 7,308

Longer than one year but not longer than five years 26,479 26,795

Longer than five years 7,414 14,181

Total 43,277 48,284


6.4.1 TOTAL COMMITMENTS PAYABLE $’000

NOMINAL AMOUNTS2019

LESS THAN 1 YEAR 1-5 YEARS 5+ YEARS TOTAL

Operating and lease commitments payable 2,753 9,402 6,355 18,510

Capital commitments payable (a) - 74,760 - 74,760

Total commitments (inclusive of GST) 2,753 84,162 6,355 93,270

Less GST receivable 250 7,651 577 8,478

Less GST receivable 2,503 76,511 5,778 84,792

6.4.1 TOTAL COMMITMENTS PAYABLE $’000

NOMINAL AMOUNTS2018

LESS THAN 1 YEAR 1-5 YEARS 5+ YEARS TOTAL

Operating and lease commitments payable 2,207 8,791 8,006 19,004

Capital commitments payable (a) - 74,760 - 74,760

Total commitments (inclusive of GST) 2,207 83,551 8,006 93,764

Less GST receivable 200 7,595 727 8,522

Total commitments (exclusive of GST) 2,007 75,956 7,279 85,242

6.4 COMMITMENTS FOR EXPENDITURE

Commitments for future expenditure include those operating and capital commitments arising from non-cancellable contractual or statutory sources and are disclosed at their nominal value and inclusive of GST. These future expenditures cease to be disclosed as commitments once the related liabilities are recognised in the balance sheet.

(a) Capital Commitments relate to a contractual obligation at 30 June 2019 to purchase land on 30 June 2021.

7. RISK, CONTINGENCIES AND JUDGEMENTS INTRODUCTIONDevelopment Victoria is exposed to risk from its activities and outside factors. In addition, it is necessary to make judgements and estimates associated with recognition and measurement of items in the financial statements. This section sets out financial instrument specific information (including exposures to financial risks) as well as those items that are contingent in nature or require a higher level of judgement to be applied, which for Development Victoria related mainly to fair value determination.

Structure 7.1 Financial instruments specific disclosures 63

7.1.1 Financial Instruments: Categorisation 65

7.1.2 Financial risk management objectives and policies 66

7.2 Fair value determination of financial assets and liabilities 70

7.2.1 Fair value determination of financial assets and liabilities 70

7.3 Contingent assets and liabilities 71

7.1 FINANCIAL INSTRUMENTS SPECIFIC DISCLOSURES INTRODUCTIONFinancial instruments arise out of contractual agreements that give rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Due to the nature of Development Victoria’s activities, certain financial assets and financial liabilities arise under statute rather than a contract (for example taxes). Such assets and liabilities do not meet the definition of financial instruments in AASB 132 Financial Instruments: Presentation.

Where relevant, for note disclosure purposes, a distinction is made between those financial assets and financial liabilities that meet the definition of financial instruments in accordance with AASB 132 and those that do not.


Categories of financial assets under AASB 9

Financial assets at amortised cost

Financial assets are measured at amortised cost if both of the following criteria are met and the assets are not designated as fair value through net result:

• the assets are held by Development Victoria to collect the contractual cash flows, and

• the assets’ contractual terms give rise to cash flows that are solely payments of principal and interests.

These assets are initially recognised at fair value plus any directly attributable transaction costs and subsequently measured at amortised cost using the effective interest method less any impairment.

The following assets are recognised in this category:

• cash and deposits;

• receivables; and

• term deposits

Categories of financial assets previously under AASB 139

Loans and receivables and cash are financial instrument assets with fixed and determinable payments that are not quoted on an active market. These assets and liabilities are initially recognised at fair value plus any directly attributable transaction costs. Subsequent to initial measurement, loans and receivables are measured at amortised cost using the effective interest method (and for assets, less any impairment). Development Victoria recognises the following assets in this category:

• cash and deposits;

• receivables; and

• term deposits.

Categories of financial liabilities under AASB 9 and previously under AASB 139

Financial liabilities at amortised cost are initially recognised on the date they are originated. They are initially measured at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, these financial instruments are measured at amortised cost with any difference between the initial recognised amount and the redemption value being recognised in profit and loss over the period of the interest bearing liability, using the effective interest rate method.

Development Victoria recognises the following liabilities in this category:

• payables;

• interest payable; and

• borrowings.

Derecognition of financial assets: A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognised when:

• the rights to receive cash flows from the asset have expired; or

• Development Victoria retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in full without material delay to a third party under a ‘pass through’ arrangement; or

• Development Victoria has transferred its rights to receive cash flows from the asset and either:

– has transferred substantially all the risks and rewards of the asset; or

– has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

Where Development Victoria has neither transferred nor retained substantially all the risks and rewards or transferred control, the asset is recognised to the extent of Development Victoria’s continuing involvement in the asset.

Derecognition of financial liabilities: A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expires.

Reclassification of financial instruments: Subsequent to initial recognition reclassification of financial liabilities is not permitted. Financial assets are required to be reclassified between fair value through net result, fair value through other comprehensive income and amortised cost when and only when Development Victoria’ business model for managing its financial assets has changes such that its previous model would no longer apply.


7.1.1 FINANCIAL INSTRUMENTS: CATEGORISATION $’000

2019

FINANCIAL ASSETS/LIABILITIES DESIGNATED AT FAIR VALUE THROUGH

PROFIT/LOSS (FVTPL)

FINANCIAL ASSETS AT AMORTISED

COST (AC)

FINANCIAL LIABILITIES AT AMORTISED

COST (AC)TOTAL

Contractual financial assets

Cash and deposits - 162,145 - 162,145

Receivables

Sale of goods and services - 47,704 - 47,704

Total contractual financial assets - 209,849 - 209,849

Contractual financial liabilities

Payables

Supplies and services - - 120,359 120,359

Amounts payable to government and agencies - - 27,587 27,587

Borrowings

Loans from TCV - - 482,305 482,305

Total contractual financial liabilities - - 630,251 630,251

7.1.1 FINANCIAL INSTRUMENTS: CATEGORISATION $’000

2018

FIFINANCIAL ASSETS/LIABILITIESDESIGNATED AT FAIR VALUETHROUGH

PROFIT/LOSS (FVTPL)

FINANCIAL ASSETS AT AMORTISED

COST (AC)

FINANCIAL LIABILITIES AT AMORTISED COST

(AC)TOTAL

Contractual financial assets

Cash and deposits - 81,500 - 81,500

Receivables

Sale of goods and services - 42,894 - 42,894

Investments and other contractual financial assets

Term deposits - 17,000 - 17,000

Total contractual financial assets - 141,394 - 141,394

Contractual financial liabilities

Payables

Supplies and services - - 87,436 87,436

Amounts payable to government and agencies - - 20,063 20,063

Borrowings

Loans from TCV - - 478,943 478,943

Total contractual financial liabilities - - 586,442 586,442

The total amounts disclosed here exclude statutory amounts (e.g. amounts owing from Victorian Government and taxes payable).


7.1.2 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIESDevelopment Victoria has minimal exposure to credit risk, liquidity risk and market risk (i.e. interest rate risk).

Development Victoria’s Debt and Treasury Management policy sets out to manage these risks and the associated volatility of its financial performance.

Risk management is carried out by Finance under policies approved by the Board.

Financial instruments: Credit risk

Credit risk refers to the possibility that a borrower will default on its financial obligations as and when they fall due. Credit risk arises from the contractual financial assets of Development Victoria, which comprise cash and deposits and non-statutory receivables. Development Victoria’s exposure to credit risk arises from the potential default of a counter party in their contractual obligations resulting in financial loss to Development Victoria.

Credit risk is measured at fair value and is monitored monthly by the CFO and the Finance team.

Development Victoria’s maximum credit risk exposure is indicated by the carrying amounts of its financial assets. Development Victoria does not have any significant concentrations of credit risk as it undertakes transactions with a large number of customers in the residential property market.

In addition, Development Victoria does not engage in hedging for its contractual financial assets and mainly obtains contractual financial assets that are on fixed interest, except for cash assets, which are mainly cash at bank. Development Victoria’s policy is to only deal with banks with high credit ratings.

The carrying amount of contractual financial assets recorded in the financial statements, net of any allowances for losses, represents Development Victoria’s maximum exposure to credit risk without taking account of the value of any collateral obtained.

There are no material financial assets which are individually determined to be impaired.

Notes:

(a) The total amounts disclosed here exclude statutory amounts (e.g. amounts owing from Victorian Government and taxes payable).

Impairment of financial assets under AASB 9 – applicable from 1 July 2018

From 1 July 2018, Development Victoria has been recording the allowance for expected credit loss for the relevant financial instruments, replacing AASB 139’s incurred loss approach with AASB 9’s Expected Credit Loss approach. Subject to AASB 9 impairment assessment include Development Victoria’s contractual receivables, statutory receivables and its investment in debt instruments.

Equity instruments are not subject to impairment under AASB 9. Other financial assets mandatorily measured or designated at fair value through net result are not subject to impairment assessment under AASB 9. While cash and cash equivalents are also subject to the impairment requirements of AASB 9, the identified impairment loss was immaterial.

Contractual receivables at amortised cost

Development Victoria applies AASB 9 simplified approach for all contractual receivables to measure expected credit losses using a lifetime expected loss allowance based on the assumptions about risk of default and expected loss rates. Development Victoria has grouped contractual receivables on shared credit risk characteristics and days past due and select the expected credit loss rate based on Development Victoria’s past history, existing market conditions, as well as forward looking estimates at the end of the financial year.

On this basis, Development Victoria determines the opening loss allowance on initial application date of AASB 9 and the closing loss allowance at end of the financial year as follows:

CREDIT QUALITY OF CONTRACTUAL FINANCIAL ASSETS THAT ARE NEITHER PASSED DUE NOR IMPAIRED $'000

2019GOVERNMENT AGENCIES

(AAA RATING)OTHER

(MIN BBB CREDIT RATING) TOTAL

Cash and deposits 162,145 - 162,145

Trade & other receivables (a) - 21,548 21,548

Amounts receivable under development agreements - 26,156 26,156

Term deposits - - -

Total contractual financial assets 162,145 47,704 209,848

CREDIT QUALITY OF CONTRACTUAL FINANCIAL ASSETS THAT ARE NEITHER PASSED DUE NOR IMPAIRED $'000

2018GOVERNMENT AGENCIES

(AAA RATING)OTHER

(MIN BBB CREDIT RATING) TOTAL

Cash and deposits 81,500 - 81,500

Trade & other receivables (a) - 5,721 5,721

Amounts receivable under development agreements - 37,173 37,173

Term deposits 17,000 - 17,000

Total contractual financial assets 98,500 42,894 141,394


Credit loss allowance is classified as other economic flows in the net result. Contractual receivables are written off when there is no reasonable expectation of recovery and impairment losses are classified as a transaction expense. Subsequent recoveries of amounts previously written off are credited against the same line item.

In prior years, a provision for doubtful debts is recognised when there is objective evidence that the debts may not be collected and bad debts are written off when identified. A provision is made for estimated irrecoverable amounts from the sale of goods when there is objective evidence that an individual receivable is impaired. Bad debts considered as written off by mutual consent.

Statutory receivables at amortised cost

From 1 July 2018, Development Victoria has been recording the allowance for expected credit loss for the relevant financial instruments, replacing AASB 139’s incurred loss approach with AASB 9’s Expected Credit Loss approach. Subject to AASB 9 impairment assessment include Development Victoria’s contractual receivables, statutory receivables and its investment in debt instruments.

Financial instruments: Liquidity risk

Liquidity risk is the risk that Development Victoria would be unable to meet its financial obligations as and when they fall due.

Development Victoria operates under the Government fair payments policy of settling financial obligations within 30 days and in the event of dispute, making payments within 30 days from date of resolution.

Development Victoria’s maximum exposure to liquidity risk is the carrying amounts of financial liabilities as disclosed in the face of the balance sheet.

Development Victoria manages liquidity risk by:

• maintaining an adequate short term reserves and banking facilities that can be drawn at short notice to meet its short-term obligations;

• holding investments and other contractual financial assets that are readily tradeable in the financial market; and

• careful maturity planning of its financial obligations based on forecasts of future cash flows.

Development Victoria’s exposure to liquidity risk is deemed insignificant based on current assessment of risk.

Financial instruments: Market risk

Development Victoria in its daily operations is exposed to a number of market risks. Market risks relate to the risk that market rates and prices will change and that this will have an adverse effect on the operating result and/or net worth of Development Victoria. These market risks primarily relate to foreign currency risk, equity price risk and interest rate risk. Development Victoria does not hold equity investments and is therefore not subject to related price risk. Objectives, policies and processes used to manage each of these risks are disclosed below.

$’000

1 JULY 2018 CURRENT 31-60 DAYS 61-90 DAYS 91-365 DAYS 365+ DAYS TOTAL

Expected Loss Rate 0% 0% 0% 17% 100%

Gross carrying amount of contractual receivables 40,110 1,974 251 558 1 42,894

Loss allowance - - - 94 1 95

$’000

30 JUNE 2019 CURRENT 31-60 DAYS 61-90 DAYS 91-365 DAYS 365+ DAYS TOTAL

Expected Loss Rate 0% 0% 0% 1% 55%

Gross carrying amount of contractual receivables 37,798 8,020 69 1,659 159 47,704

Loss allowance - - - 17 87 104

$’000

2019 2018

Balance at beginning of the year (184) (290)

Opening retained earnings adjustment on adoption of AASB 9 89 -

Opening Loss Allowance (95) (290)

Increase in provision recognised in the net result (9) -

Reversal of unused provision recognised in the net result - 106

Balance at end of the year (104) (184)


Interest Rate Risk

Fair value interest rate risk is the risk that the fair value of a financial instrument will fluctuate because of changes in market interest rates. Development Victoria does not hold any interest bearing financial instruments that are measured at fair value, and therefore has no exposure to fair value interest rate risk.

Cash flow interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Development Victoria has minimal exposure to cash flow interest rate risk through its cash and deposits that are at floating rates.

Development Victoria manages cash flow interest rate risk through a mixture of short term and longer term investments, and undertaking fixed rate or non-interest bearing financial instruments with relatively even maturity profiles, with only insignificant amounts of financial instruments at floating rate.

The carrying amounts of financial assets and financial liabilities that are exposed to interest rates and Development Victoria’s sensitivity to interest rate risk are set out below.

Sensitivity Disclosure Analysis

Taking into account past performance, future expectations, economic forecasts, and management’s knowledge and experience of the financial markets, Development Victoria believes that a movement of 100 basis points up and down in market interest rates (AUD) is ‘reasonably possible’ over the next 12 months.

Notes:

(a) Sensitivity of cash and cash equivalents to a one per cent movement in market interest rate. All interest bearing balances are short term investments and subject to sensitivity: ($162,145m x 0.01 = $1.62m).

(b) Sensitivity of borrowings to a one per cent movement in market interest rate. Only the liabilities with a variable rate ($45.9m) are subject to the sensitivity.

(c) The total amounts disclosed here exclude statutory amounts (e.g. amounts owing from Victorian Government and taxes payable).

INTEREST RATE RISK SENSITIVITY

$’000 DECREASE BY 100 BASIS POINTS INCREASE BY 100 BASIS POINTS

2019CARRYING

AMOUNTCOMPREHENSIVE

RESULTEQUITY COMPREHENSIVE

RESULTEQUITY

Contractual financial assets:

Cash and cash deposits (a) 162,145 (1,621) (1,621) 1,621 1,621

Receivables (c) 47,704 - - - -

Contractual financial liabilities:

Payables (c) 147,946 - - - -

Borrowings (b) 482,305 (459) (459) 459 459

Total impact (2,080) (2,080) 2,080 2,080

INTEREST RATE RISK SENSITIVITY

$’000 DECREASE BY 100 BASIS POINTS INCREASE BY 100 BASIS POINTS

2018CARRYING

AMOUNTCOMPREHENSIVE

RESULTEQUITY COMPREHENSIVE

RESULTEQUITY

Contractual financial assets:

Cash and cash deposits (a) 81,500 (815) (815) 815 815

Receivables (c) 42,710 - - - -

Contractual financial liabilities:

Payables (c) 107,499 - - - -

Borrowings (b) 478,943 (1,675) (1,675) 1,675 1,675

Total impact (2,490) (2,490) 2,490 2,490


The tables that follow show the impact on Development Victoria’s net result and equity for each category of financial instrument held at the end of the reporting period, if the above movements were to occur.

Notes:

(a) The total amounts disclosed here exclude statutory amounts (e.g. amounts owing from Victorian Government and taxes payable)

(b) Maturity analysis is presented using the contractual undiscounted cash flows

INTEREST RATE RISK EXPOSURE OF FINANCIAL INSTRUMENTS $’000

2019

WEIGHTED AVERAGE

INTEREST RATE %

TOTAL CARRYING AMOUNT PER

BALANCE SHEET

FIXED INTEREST

RATE

FLOATING INTEREST

RATE

NON- INTEREST BEARING

Financial assets

Cash and deposits 1.40% 162,145 - 162,145 -

Receivables (a)

Trade receivables 17,681 - - 17,681

Amounts receivable under development agreements 26,156 - - 26,156

Other receivables 3,867 - - 3,867

Investments - Term deposits - - - -

Total contractual financial assets 209,849 - 162,145 47,704

Financial liabilities

Payables (b)

Trade & other payables 147,946 - - 147,946

Borrowings

Loans from TCV 4.64% 482,305 436,400 45,905 -

Total contractual financial liabilities 630,251 436,400 45,905 147,946

INTEREST RATE RISK EXPOSURE OF FINANCIAL INSTRUMENTS $’000

2018

WEIGHTED AVERAGE

INTEREST RATE %

TOTAL CARRYING AMOUNT PER BALANCE

SHEET

FIXED INTEREST

RATE

FLOATING INTEREST

RATE

NON- INTEREST BEARING

Financial assets

Cash and deposits 1.45% 81,500 - 81,500 -

Receivables (a)

Trade receivables 5,121 - - 5,121

Amounts receivable under development agreements 37,173 - - 37,173

Other receivables 600 - - 600

Investments – Term deposits 2.04% 17,000 17,000 - -

Total contracual financial assets 141,394 17,000 81,500 42,894


Payables (b)

Trade and other payables 107,499 - - 107,499

Borrowings

Loans from TCV 5.04% 478,943 311,400 167,543 -

Total contractual financial liabilities 586,442 311,400 167,543 107,499


7.2 FAIR VALUE DETERMINATIONFair value determination requires judgement and the use of assumptions. This section discloses the most significant assumptions used in determining fair values. Changes to assumptions could have a material impact on the results and financial position of Development Victoria.

This section sets out information on how Development Victoria determined fair value for financial reporting purposes. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The following assets and liabilities are carried at fair value: • financial assets and liabilities at fair value through operating result; and

• property, plant and equipment.

In addition, the fair values of other assets and liabilities that are carried at amortised cost, also need to be determined for disclosure purposes.

Development Victoria determines the policies and procedures for determining fair values for both financial and non-financial assets and liabilities as required.

Fair value estimation

In determining fair values, a number of inputs are used. To increase consistency and comparability in the financial statements, these inputs are categorised into three levels, also known as the fair value hierarchy. The levels are as follows:

• Level 1 – quoted (unadjusted) market prices in active markets for identical assets or liabilities;

• Level 2 – valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable; and

• Level 3 – valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

Development Victoria determines whether transfers have occurred between levels in the hierarchy by reassessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

The Valuer-General Victoria (VGV) is Development Victoria’s independent valuation agency.

7.2.1 FAIR VALUE DETERMINATION OF FINANCIAL ASSETS AND LIABILITIESDevelopment Victoria currently holds a range of financial instruments that are recorded in the financial statements where the carrying amounts are a reasonable approximation of fair value, either due to their short term nature or with the expectation that they will be paid in full by the end of the 2019 reporting period.

These financial instruments include:

Where the fair value of financial instruments is different from the carrying amounts, the following information has been included to disclose the difference:

FINANCIAL ASSETS FINANCIAL LIABILITIES

Cash and deposits Payables

Receivables: • Supplies and services

• Sales of goods and services • Amounts payable to government and agencies

• Receivables • Other payables

Investments and other contractual financial assets: Borrowings:

• Term deposits • Loans from TCV

FAIR VALUE OF FINANCIAL INSTRUMENTS MEASURED AT AMORTISED COST $’000

2019CARRYING

AMOUNT 2019FAIR VALUE

2019CARRYING

AMOUNT 2018FAIR VALUE

2018

Financial assets

Receivables

Term deposits - - 17,000 16,995


Payables

Loans from TCV 482,305 497,954 478,943 485,349


7.3 CONTINGENT ASSETS AND CONTINGENT LIABILITIES Contingent assets and contingent liabilities are not recognised in the balance sheet but are disclosed and, if quantifiable, are measured at nominal value.

Contingent assets and liabilities are presented inclusive of GST receivable or payable respectively.

Contingent assets

Contingent assets are possible assets that arise from past events, whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity.

These are classified as either quantifiable, where the potential economic benefit is known, or non-quantifiable.

Contingent liabilities

Contingent liabilities Contingent liabilities are:

• possible obligations that arise from past events, whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity;

• present obligations that arise from past events but are not recognised because the amount of the obligations cannot be measured with sufficient reliability.

Contingent liabilities are also classified as either quantifiable or non-quantifiable.

Non-quantifiable contingent liabilities are potential obligations that arise from:

• indemnities provided in relation to transactions, including financial arrangements and consultancy services; and

• performance guarantees, warranties, letters of comfort and deeds in respect of certain obligations.

QUANTIFIABLE CONTINGENT ASSETS 2019 2018

$’000 $’000

Contingent assets

Bank guarantees (a) 77,484 92,289

Total 77,484 92,289

Notes: (a) The bank guarantees provided to Development Victoria relate to stage development and performance securities.

Note:(a) Bank guarantees have been issued by Development Victoria’s bankers to municipalities and other government bodies for satisfactory

performance of works undertaken by Development Victoria. If a body is not satisfied with Development Victoria’s performance, it may claim against the relevant guarantee.

QUANTIFIABLE CONTINGENT LIABILITIES 2019 2018

$’000 $’000

Bank guarantees (a) 20,884 21,921

Total 20,884 21,921


8. OTHER DISCLOSURES INTRODUCTIONThis section includes those additional disclosures required by accounting standards or otherwise, that are material, for the understanding of this financial report.

Structure 8.1 Other economic flows included in the net result 72

8.2 Dividends paid 73

8.3 Joint operations 73

8.4 Change in accounting policies 74

8.4.1 Changes to classification and measurement in accounting policies 74

8.4.2 Changes to the impairment of financial assets 74

8.4.3 Transition impact 75

8.5 Responsible persons 76

8.6 Remuneration 76

8.6.1 Remuneration of responsible persons 76

8.6.2 Remuneration of executives 77

8.7 Related parties 77

8.8 Remuneration of auditors 79

8.9 Subsequent events 79

8.10 Deed of support 79

8.11 Australian Accounting Standards issued that are not yet effective 80

8.1 OTHER ECONOMIC FLOWS INCLUDED IN NET RESULT Other economic flows are changes in the volume or value of an asset or liability that do not result from transactions. Other gains/(losses) from other economic flows include the gains or losses from:

• the revaluation of the present value of the long service leave liability due to changes in the bond interest rates; and

• reclassified amounts relating to available-for-sale financial instruments from the reserves to net result due to a disposal or derecognition of the financial instrument. This does not include reclassification between equity accounts due to machinery of government changes or ‘other transfers’ of assets.

8.1 OTHER ECONOMIC FLOWS INCLUDED IN NET RESULT 2019 2018

$’000 $’000

Net gain/(loss) on non-financial assets

Disposal of property plant and equipment (including intangible assets) (46) (1,674)

Write back of previous impairments of land inventory/(Impairment of land inventory) (c) (8,867) 47,817

Total net gain/(loss) on non-financial assets (a) (8,913) 46,143

Net gain/(loss) on financial instruments

Impairment of:

Reversal of bad debt provision - 106

Loans and Receivables 80 -

Total net gain/(loss) on financial instruments 80 106

Other gains/(losses) from other economic flows

Net gain/(loss) arising from revaluation of long service liability 1,485 (1,576)

Total other gains/(losses) from other economic flows (b) 1,485 (1,576)

Total (7,348) 44,673

Notes: (a) Net gain/(loss) on disposal of non-financial assets is recognised at the date of disposal and is determined after deducting the proceeds from

disposal from the carrying value of the asset at the time.(b) Other gains/(losses) from other economic flows include the gains or losses from the revaluation of the present value of the long service leave

liability due to changes in the bond interest rate.(c) Impairment of land inventory relating to the Revitalising Central Dandenong project, further to re-measurement of future revenues.


8.2 DIVIDENDS PAID An obligation to pay a dividend only arises after a formal determination is made by the Treasurer of the State of Victoria following consultation between Development Victoria’s Board, the Minister for Planning and the Treasurer.

8.3 JOINT OPERATIONSDevelopment Victoria has eight joint operations of which two are considered material. These are:

1. Riverwalk, Werribee, Victoria This 197 hectare site was previously the Werribee Treatment Plant. The land is owned by Melbourne Water which has entered into a Partnering Deed with Development Victoria for Development Victoria to develop the land to deliver an estimated 2,260 residual lots at the completion of the project. Development Victoria is responsible for all development costs, and the profit share percentage between Development Victoria and Melbourne Water was agreed in the Partnering Deed. There is a Project Control Group with equal membership and voting rights for both Development Victoria and Melbourne Water.

3. Avondale Heights, Victoria This 4.3 hectare site was previously the Kangan Batman TAFE Avondale Heights campus. Development Victoria owns the land and entered an agreement with Frasers Property Australia (formerly Australand) for Frasers Property to develop the land and deliver approximately 135 townhouses. Frasers Property is responsible for all development costs, and the profit share percentage between Development Victoria and Frasers Property was agreed in the Agreement. There is a Project Control Group with equal membership and voting rights from both Development Victoria and Frasers Property.

PAID 2019

$’000

Development Victoria paid 2017-18 Declared Project Dividends on 29 October 2018, in accordance with a consultation letter from the Treasurer of the State of Victoria dated 4 October 2018.

9,400

Total dividends paid 9,400

PAID 2018

$’000

Development Victoria paid 2015-16 and 2016-17 Declared Project Dividends on 30 November 2017, in accordance with a consultation letter from the Treasurer of the State of Victoria dated 25 October 2017.

10,041

Development Victoria paid a 2015-16 and 2016-17 Revitalising Central Dandenong Project Dividends on 30 November 2017, in accordance with a consultation letter from the Treasurer of the State of Victoria dated 25 October 2017.

4,775

Development Victoria paid a 2017-18 special dividend on 29 June 2018, in accordance with a consultation letter from the Treasurer of the State of Victoria dated 28 June 2018.

25,000

Total dividends paid 39,816

8.4 CHANGE IN ACCOUNTING POLICIES Development Victoria is applying AASB 15 Revenue from Contracts with Customers and AASB 9 Financial Instruments for the first time in the year ending 30 June 2019.

AASB 15 Revenue from Contracts with Customers

The core principle of AASB 15 requires an entity to recognise revenue when the entity satisfies a performance obligation by transferring a promised good or service to a customer.

Revenue from contracts with customers are recognised when performance obligations outlined in the contract with the customer is met, at the consideration to which DV expects to be entitled to, as outlined in the same contract.

Development Victoria has performed a detailed impact assessment of AASB 15 and identified a nil impact upon Development Victoria’s financial statements. No adjustment to the financial statements is proposed.

AASB 9 Financial Instruments

Development Victoria has elected to apply the limited exemption in AASB 9 paragraph 7.2.15 relating to transition for classification and measurement and impairment, and accordingly has not restated comparative periods in the year of initial application. As a result:

(a) any adjustments to carrying amounts of financial assets or liabilities are recognised at beginning of the current reporting period with difference recognised in opening retained earnings; and

(b) financial assets and provision for impairment have not been reclassified and/or restated in the comparative period.

AASB 9 introduces a major change to hedge accounting. However, it is Development Victoria’s policy not to apply hedge accounting.

This note explains the impact of the adoption of AASB 9 Financial Instruments on Development Victoria’s financial statements.


8.4.1 CHANGES TO CLASSIFICATION AND MEASUREMENT IN ACCOUNTING POLICIES

On initial application of AASB 9 on 1 July 2018, Development Victoria’s management has assessed for all financial assets based on Development Victoria’s business models for managing the assets.

Development Victoria has performed a detailed impact assessment of AASB 9 and identified the following changes to the classification of financial assets:

(a) Contractual receivables previously classified as other loans and receivables under AASB 139 are now reclassified as financial assets at amortised cost under AASB 9. A decrease of $89,000 in loss allowance for these assets was recognised in an opening retained earnings for the period.

(b) Term deposits previously classified as held to maturity under AASB 139 are now reclassified as financial assts at amortised cost under AASB 9. There was no difference between the previous carrying amount and the revised carrying amount at 1 July 2018 to be recognised in opening retained earnings

The following table summarises the required and elected reclassification upon adoption of AASB 9. The main effects resulting from the reclassification are as follows:

8.4.2 CHANGES TO THE IMPAIRMENT OF FINANCIAL ASSETSChanges to the impairment of financial assets

Under AASB 9, all loans and receivables as well as other debt instruments not carried at fair value through net result are subject to AASB 9’s new expected credit loss (ECL) impairment model, which replaces AASB 139’s incurred loss approach.

For other loans and receivables, Development Victoria applies the AASB 9 simplified approach to measure expected credit losses based on the change in the ECLs over the life of the asset. Application of the lifetime ECL allowance method results in a decrease in the impairment loss allowance of $89,000. Refer to note 7.12 for details about the calculation of the allowance. The loss allowance increased further by $9,000 for these financial assets during the financial year.

For debt instruments at amortised costs, Development Victoria considers them to be low risk and therefore determines the loss allowance based on ECLs associated with the probability of default in the next 12 months. Applying the ECL model does not result in recognition of additional loss allowance (previous loss allowance was nil). No further increase in allowance in the current financial year.

8.4.3 TRANSITION IMPACTTransition impact

The transition impact of first-time adoption of AASB 9 on the Comprehensive Operating Statement and Balance Sheet has been summarised in the following tables.

Impact on Comprehensive Income Statement as at 1 July 2018 as follows:

AASB 9 MEASUREMENT CATEGORIES $’000

AS AT 30 JUNE 2018 AASB 139 MEASUREMENT

CATEGORIES

FAIR VALUE THROUGH NET

RESULT (DESIGNATED)

FAIR VALUE THROUGH NET

RESULT (MANDATORY)

AMORTISED COST

FAIR VALUE THROUGH OTHER

COMPREHENSIVE INCOME

Loans and receivables (a)

Sale of goods and services 42,110 - - 42,110 -

Other receivables 600 - - 600 -

Held to maturities

Term deposits (b) 17,000 - - 17,000 -

As at 1 July 2018 59,710 - - 59,710 -

COMPREHENSIVE OPERATING STATEMENT NOTES 30 JUNE 2018

Impairment of financial assets 7.1.2 89

Comprehensive income 89


BALANCE SHEET $’000

NOTES AMOUNT AT 30 JUNE 2018

RECLASSIFICATION REMEASUREMENT (ECL) RESTATED AMOUNT AT 1 JULY 2018

Cash and Deposits 6.2 81,500 - - 81,500

Loans and receivables 5.1 55,313 (55,313) - -

Financial assets held for maturity 4.3 17,000 (17,000) - -

Financial assets at amortised cost - 72,313 - 72,313

Impairment loss allowance 5.1 (184) - 89 (95)

Other financial assets - - - -

Total financial assets 153,629 - 89 153,718

Total liabilities 695,955 - - 695,955

Accumulated surplus/(deficit) 35,492 - 89 35,581

Other items in equity 125,765 - - 125,765

Total equity 161,257 - 89 161,346

Impact on Balance Sheet is illustrated with the following reconciliation between the carrying amounts under AASB 139 at 30 June 2018 and the balances reported under AASB 9 at 1 July 2018 for each affected balance sheet line item:

8.5 RESPONSIBLE PERSONS In accordance with the Ministerial Directions issued by the Assistant Treasurer under the Financial Management Act 1994, the following disclosures are made regarding Responsible Persons for the reporting period.

The persons who held the positions of Ministers and Accountable Officer in Development Victoria are as follows:

Name Position Relevant period

The Hon. Jacinta Allan Minister for Major Projects 1 July 2018 to 30 November 2018

The Hon. Gavin Jennings Minister for Priority Precincts 1 December 2018 to 30 June 2019

James MacKenzie Chairperson 1 July 2018 to 30 June 2019

Tony De Domenico Deputy Chairperson 1 July 2018 to 18 March 2019

Graeme Parton Acting Deputy Chairperson 9 May 2019 to 30 June 2019

Tamara Brezzi Board member 1 July 2018 to 1 May 2019

Rebecca Casson Board member 1 July 2018 to 30 June 2019

Justin Hanney Board member 1 July 2018 to 29 November 2018

Natalie MacDonald Board member 1 July 2018 to 30 June 2019

Graeme Parton Board member 1 July 2018 to 30 June 2019

Christine Wyatt Board member 1 July 2018 to 30 June 2019

Lou Farinotti Board member 1 July 2018 to 30 June 2019

Megan Haas Board member 14 May 2019 to 30 June 2019

Jacqui Walters Board member 14 May 2019 to 30 June 2019

Angela Skandarajah Chief Executive Office (Accountable Officer) 4 February 2019 to 30 June 2019

Angela Skandarajah Acting Chief Executive Officer (Accountable Officer) 1 July 2018 to 3 February 2019


8.6 REMUNERATION Remuneration received or receivable by the Accountable Officer in connection with the management of Development Victoria during the 12 month reporting period is listed below. The CEO’s remuneration was in the range: $420,000 - $429,000 for the reporting period. ($680,000 – $689,000 in the prior period).

During this financial period Development Victoria has paid insurance premiums in respect of directors and officers liability insurance for the Directors and Officers of the Authority.

8.6.1 REMUNERATION OF RESPONSIBLE PERSONSRemuneration received or receivable by the responsible officers, excluding the Accountable Officer and Minister, during the reporting period was in the range:

Remuneration of the Responsible Minister is included in the financial statements of the Department of Parliamentary Services.

12 month period 2019

15 month period 2018

$0 2 2

$1 - $9,999 2 0

$30,000 - $39,999 2 0

$40,000 - $49,999 4 1

$50,000 - $59,999 0 3

$70,000 - $79,999 0 1

$100,000 - $119,999 1 0

$130,000 - $139,999 0 1

Total number of responsible persons 11 8

Total remuneration ($'000) 348 430

8.6.2 REMUNERATION OF EXECUTIVES The total remuneration of executive officers, other than the CEO, and their total remuneration during the reporting period are shown in the table below. Total annualised employee equivalents provides a measure of full time equivalent executive officers over the reporting period.

Remuneration comprises employee benefits in all forms of consideration paid, payable or provided by the entity, or on behalf of Development Victoria, in exchange for services rendered, and is disclosed in the following categories.

Short-term employee benefits include amounts such as wages, salaries, annual leave or sick leave that are usually paid or payable on a regular basis, as well as non-monetary benefits such as allowances and free or subsidised goods or services.

Post-employment benefits include superannuation entitlements, pensions, post-employment life insurance, post-employment health care and other retirement benefits paid or payable on a discrete basis when employment has ceased.

Other long-term benefits include long service leave, other long service benefits or deferred compensation.

Termination benefits include termination of employment payments, such as severance packages.

FINANCIAL YEAR 15 MONTH PERIOD

REMUNERATION OF EXECUTIVE OFFICERS 2019 2018

Short-term employee benefit 7,445 8,550

Post-employment benefit 706 700

Other long-term benefit 396 195

Termination benefit - 75

Total remuneration (a) 8,547 9,520

Total number of executives 39 37

Total annualised employee equivalent (AEE) (b) 29.15 29.23

Notes:

(a) The total number of executive officers includes persons who meet the definition of Key Management Personnel (KMP) of Development Victoria under AASB 124 Related Party Disclosures and are also reported within the related parties note disclosure (Refer to Note 8.6)

(b) Annualised employee equivalent (AAE) is based on the time fraction worked over the reporting period


8.7 RELATED PARTIES Development Victoria is a wholly owned and controlled entity of the State of Victoria.

Related parties of Development Victoria include:• all key management personnel and their close family members and personal business interests;

• all cabinet ministers and their close family members; and

• all departments and public sector entities that are controlled and consolidated into the whole of state consolidated financial statements. All related party transactions have been entered into on an arm’s length basis.

Significant transactions with government-related entities

During the financial period, the following aggregate transactions were undertaken and balances held with other Victorian Government controlled entities. These transactions were undertaken in the ordinary course of operations.

GOVERNMENT-RELATED ENTITIES NATURE OF TRANSACTION 2019 $’000

2018 $’000

Revenue

Department of Treasury and Finance Rental Revenue - 670

Department of Jobs, Precincts and Regions (*) Rental Revenue - 1,518

Major Projects Victoria Rental Revenue - 441

Department of Environment, Land Water and Planning Cost reimbursements for staff secondments - 611

Department of Education and Training Land sales revenue 27,307 -

Department of Jobs, Precincts and Regions (*) Capital provided towards civic infrastructure projects 17,565 45,299

Department of Jobs, Precincts and Regions (*) Project cost recovery 20,419 -

Melbourne and Olympic Parks Trust Capital provided towards civic infrastructure projects 133,649 63,262

Department of Health and Human Services Victoria Capital provided towards civic infrastructure projects 219 2,924

State Library Victoria Capital provided towards civic infrastructure projects 52,564 21,798

Victorian Arts Centre Trust Capital provided towards civic infrastructure projects 395 480

Kardinia Park Stadium Trust Capital provided towards civic infrastructure projects 2,023 829

State Sport Centres Trust Capital provided towards civic infrastructure projects 15,860 1,650

Department of Transport (*) Cost reimbursements for staff secondments 521 -

Department of Transport (*) Capital provided towards civic infrastructure projects 24,076 -

Department of Premier and Cabinet Capital provided towards civic infrastructure projects - 1,360

Department of Premier and Cabinet Project Cost Recovery 2,036 -

Melbourne Water Corporation Land sale revenue - 632

Yarra Valley Water Authority contributions towards infrastructure costs 8,388 447

Expenditure

Department of Jobs, Precincts and Regions(*) Land acquisition payments - 14,038

Department of Education and Training Land acquisition payments - 31,900

Department of Education and Training Utility Contribution 15,000 -

Department of Environment, Land Water and Planning Professional fees - Land valuations - 612

Department of Environment, Land Water and Planning Land Valuations 335 -

Department of Health and Human Services Utility Contribution 519 -

Department of Transport (*) Project Costs 688 -

Department of Treasury and Finance Recovery of Costs 688 -

Department of Treasury and Finance Dividends 9,400 39,815

Department of Treasury and Finance Financial accommodation levy 4,401 4,239

Department of Treasury and Finance Land acquisition payments 7,552 3,239

Department of Treasury and Finance Local government rate related charges & other charges 932 858

Melbourne Water Corporation Revenue share from development agreements 14,132 13,776

Melbourne Water Corporation Authority Contribution 1,140 -State Library of Victoria Project Costs 1,506 -


GOVERNMENT-RELATED ENTITIES NATURE OF TRANSACTION 2019 $’000

2018 $’000

Expenditure (continued)

State Revenue Office Land Tax Assessment 6,870 -

State Revenue Office Congestion Levy 8,247 -

Victorian Auditor General Office Audit Fees 138 134

Victorian Managed Insurance Authority Insurances 899 997

Other

Treasury Corporation of Victoria (TCV) Cash and deposits - 98,500

Treasury Corporation of Victoria (TCV) Borrowings 482,305 478,943

*Previously Department of Economic Development, Jobs, Transport and Resources

Development Victoria delivers major project development and delivery services to clients within the Victorian State Government. This service may involve the delivery of projects end to end on behalf of a client department or client Minister and typically includes the development of a project business case to support a funding request by the client department through to project delivery. All work is completed on a fee-for-service basis, with only consultancy fees associated with projects recognised as revenue. Although Development Victoria administers project budgets on behalf clients the budget risk remains with the client agency (refer to note 1).

Key management personnel of Development Victoria include the named Responsible persons members of Development Victoria’s Board, the Chief Executive Officer as disclosed in Note 8.5, and members of the Senior Executive Team, which includes:

KEY MANAGEMENT PERSONNEL POSITION TITLE 2018-2019

The Hon. Jacinta Allan Minister for Major Projects 1 July 2018 to 30 November 2018

The Hon. Gavin Jennings Minister for Priority Precincts 1 December 2018 to 30 June 2019

James MacKenzie Chairperson 1 July 2018 to 30 June 2019

Tony De Domenico Deputy Chairperson 1 July 2018 to 18 March 2019

Graeme Parton Acting Deputy Chairperson 9 May 2019 to 30 June 2019

Tamara Brezzi Board member 1 July 2018 to 18 March 2019

Rebecca Casson Board member 1 July 2018 to 1 May 2019

Justin Hanney Board member 1 July 2018 to 29 November 2018

Natalie MacDonald Board member 1 July 2018 to 30 June 2019

Graeme Parton Board member 1 July 2018 to 30 June 2019

Christine Wyatt Board member 1 July 2018 to 30 June 2019

Lou Farinotti Board member 1 July 2018 to 30 June 2019

Megan Haas Board member 14 May 2019 to 30 June 2019

Jacqui Walters Board member 14 May 2019 to 30 June 2019

Angela Skandarajah Chief Executive Officer (Accountable Officer) 4 February 2019 to 30 June 2019

Angela Skandarajah Acting Chief Executive Officer (Accountable Officer) 1 July 2018 to 3 February 2019

Manny Bikakis CFO and Group Head Operations 4 February 2019 to 30 June 2019

Manny Bikakis CFO and Acting Group Head Operations 1 July 2018 to 3 February 2019

Geoff Ward Group Head - Precincts 1 July 2018 to 30 June 2019

Neil Anderson Group Head - Property 30 July 2018 to 30 June 2019

Tom Considine Group Head - Strategy and Civic Infrastructure 4th February 2019 to 30 June 2019

Tom Considine Acting Group Head - Strategy and Civic Infrastructure 1 July 2018 to 3rd February 2019


The compensation detailed below excludes the salaries and benefits the Portfolio Minister receives. The Minister’s remuneration and allowances is set by the Parliamentary Salaries and Superannuation Act 1968 and is reported within the Department of Parliamentary Services’ Financial Report.

2019 2018

COMPENSATION OF KMPS $’000 $’000

Short - term benefits 2,294 4,332

Post employment benefits 161 292

Other long term benefits 41 72

Termination benefits - 133

Total compensation (a) 2,496 4,830

Note:(a) Note that KMPs (excluding the CEO) are also reported in the disclosure of remuneration of executive officers (Note 8.5).

Transactions and balances with key management personnel and other related parties

Given the breadth and depth of State government activities, related parties transact with the Victorian public sector in a manner consistent with other members of the public e.g. stamp duty and other government fees and charges. Further employment of processes within the Victorian public sector occur on terms and conditions consistent with the Public Administration Act 2004 and Codes of Conduct and Standards issued by the Victorian Public Sector Commission. Procurement processes occur on terms and conditions consistent with the Victorian Government Procurement Board requirements.

Development Victoria has prepared the related party disclosures for the year based on reasonable enquiries made by management in relation to the portfolio ministers and their related parties and the information available to the organisation.

Outside the normal citizen type transactions with Development Victoria, there were no related party transactions that involved key management personnel, their close family members and their personal business interests. No provision has been required, nor any expense recognised, for impairment of receivables from related parties.

The following Board directors were employees of Victorian Government Departments during the reporting period:

Ms Christine Wyatt: Department of Jobs, Precincts and Regions (DJPR)

Mr Justin Hanney: Department of Economic Development, Jobs, Transport and Resources (DEDJTR)

Mr James MacKenzie: Director (President) of Victorian Arts Centre Trust and Chairmen of Victorian Funds Management Corporation (VFMC).

Transactions with these entities are reported under Significant transactions with government-related entities above.

8.8 REMUNERATION OF AUDITORS

2019 $’000

2018 $’000

Remuneration of the Victorian Auditor-General's Office for:

Audit of the financial statements 138 134

Total remuneration of Victorian Auditor-General's Office 138 134

Other non-audit services (a)

Total remuneration of non-audit services - -

Total 138 134

(a) The Victorian Auditor-General’s Office is not allowed to provide non-audit services.

8.9 SUBSEQUENT EVENTS No subsequent events have been identified.

8.10 DEED OF SUPPORT In fulfilling its objectives, Development Victoria executes development agreements from time to time and requires funding in order to carry out its rights and obligations under those development agreements.

Development Victoria also requires funding from time to time to meet other costs incurred in carrying out the functions under the Development Victoria Act 2003.

The Treasurer of the State of Victoria has provided a Deed of Support in favour of Development Victoria in respect of the loans for the Docklands project from Treasury Corporation of Victoria (TCV). In the event of delayed receipts from developers or other prescribed events of support, the Treasurer will provide appropriate financial support to Development Victoria to avoid Development Victoria’s default under its TCV borrowing obligations.

TCV’s loans to Development Victoria in respect of the General Fund have the benefit of a guarantee from the Government of Victoria under section 13(2) of the Borrowing and Investment Powers Act 1987.

8.11 AUSTRALIAN ACCOUNTING STANDARDS ISSUED THAT ARE NOT YET EFFECTIVE The table below outlines the accounting pronouncements that have been issued but not effective for 2018-19, applicable to Development Victoria, which may result in potential impacts on public sector reporting for future reporting periods.

STANDARD/INTERPRETATION SUMMARY

APPLICABLE FOR ANNUAL REPORTING PERIODS BEGINNING ON

IMPACT ON ENTITY FINANCIAL STATEMENTS

AASB 16 Leases The key changes introduced by AASB 16 include the recognition of most operating leases (which are currently not recognised) on balance sheet.

01-July-2019 The assessment has indicated that some operating leases will come on balance sheet, recognition of the right-of-use assets and lease liabilities will cause net debt to increase. Rather than expensing the lease payments, depreciation of right-of-use assets and interest on lease liabilities will be recognised in the income statement with marginal impact in the operating surplus.

DV have performed a detailed impact assessment of AASB16 and the potential impact in the initial year of application has been estimated as follows:

- $17.5m of additional right of use assets on the balance sheet;

- $17.5m of corresponding lease liabilities;

- Additional depreciation expense of $2.6m; and

- Additional $376k of interest expense

No change for lessors.

AASB 1059 Service Concession Arrangements: Grantor

The principle of AASB 1059 requires a grantor to record assets used in service concession arrangements at current replacement cost, in accordance with AASB 13.

01-July-2019 No material service concessions have been identified by Development Victoria.

CERTIFICATION OF FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2019DECLARATION IN THE FINANCIAL STATEMENTS

The attached financial statements for Development Victoria have been prepared in accordance with Direction 5.2 of the Standing Directions of the Assistant Treasurer under the Financial Management Act 1994, applicable Financial Reporting Directions, Australian Accounting Standards including interpretations, and other mandatory professional reporting requirements

We further state that, in our opinion, the information set out in the comprehensive operating statement, balance sheet, statement of changes in equity, cash flow statement and accompanying notes, presents fairly the financial transactions during the year ended 30 June 2019 and financial position of Development Victoria at 30 June 2019.

At the time of signing, we are not aware of any circumstance which would render any particulars in the financial statements to be misleading or inaccurate.

We authorise the attached statements for issue on 29 August 2019

James MacKenzie Angela Skandarajah

Chairperson CEO

Manny Bikakis

Group Head Operations


AUDITOR GENERAL’S REPORT

Independent Auditor’s Report To the Board of Development Victoria

Opinion I have audited the financial report of Development Victoria (the authority) which comprises the:

• balance sheet as at 30 June 2019 • comprehensive operating statement for the year then ended • statement of changes in equity for the year then ended • cash flow statement for the year then ended • notes to the financial statements, including significant accounting policies • certification of financial statements for the period ended 30 June 2019.

In my opinion the financial report presents fairly, in all material respects, the financial position of the authority as at 30 June 2019 and their financial performance and cash flows for the year then ended in accordance with the financial reporting requirements of Part 7 of the Financial Management Act 1994 and applicable Australian Accounting Standards.

Basis for Opinion

I have conducted my audit in accordance with the Audit Act 1994 which incorporates the Australian Auditing Standards. I further describe my responsibilities under that Act and those standards in the Auditor’s Responsibilities for the Audit of the Financial Report section of my report.

My independence is established by the Constitution Act 1975. My staff and I are independent of the authority in accordance with the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to my audit of the financial report in Victoria. My staff and I have also fulfilled our other ethical responsibilities in accordance with the Code.

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.

Other Information

The Board of the authority is responsible for the Other Information, which comprises the information in the authority’s annual report for the year ended 30 June 2019, but does not include the financial report and my auditor’s report thereon.

My opinion on the financial report does not cover the Other Information and accordingly, I do not express any form of assurance conclusion on the Other Information. However, in connection with my audit of the financial report, my responsibility is to read the Other Information and in doing so, consider whether it is materially inconsistent with the financial report or the knowledge I obtained during the audit, or otherwise appears to be materially misstated. If, based on the work I have performed, I conclude there is a material misstatement of the Other Information, I am required to report that fact. I have nothing to report in this regard.



2

Board’s responsibilities for the financial report

The Board of the authority is responsible for the preparation and fair presentation of the financial report in accordance with Australian Accounting Standards and the Financial Management Act 1994, and for such internal control as the Board determines is necessary to enable the preparation and fair presentation of a financial report that is free from material misstatement, whether due to fraud or error.

In preparing the financial report, the Board is responsible for assessing the authority’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless it is inappropriate to do so.

Auditor’s responsibilities for the audit of the financial report

As required by the Audit Act 1994, my responsibility is to express an opinion on the financial report based on the audit. My objectives for the audit are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes my opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.

As part of an audit in accordance with the Australian Auditing Standards, I exercise professional judgement and maintain professional scepticism throughout the audit. I also:

• identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the authority’s internal control

• evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Board

• conclude on the appropriateness of the Board’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the authority’s ability to continue as a going concern. If I conclude that a material uncertainty exists, I am required to draw attention in my auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify my opinion. My conclusions are based on the audit evidence obtained up to the date of my auditor’s report. However, future events or conditions may cause the authority to cease to continue as a going concern.


3

Auditor’s responsibilities for the audit of the financial report (continued)

• evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation.

I communicate with the Board regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during my audit.

MELBOURNE 13 September 2019

Simone Bohan as delegate for the Auditor-General of Victoria

3

Auditor’s responsibilities for the audit of the financial report (continued)

• evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation.

I communicate with the Board regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during my audit.

MELBOURNE 13 September 2019

Simone Bohan as delegate for the Auditor-General of Victoria


DISCLOSURE INDEXDevelopment Victoria’s annual report is prepared in accordance with all relevant Victorian legislation and pronouncements. This index has been prepared to facilitate identification of Development Victoria’s compliance with statutory disclosure requirements.

Legislation Requirement Page reference

Ministerial Directions & Financial Reporting Directions

Point of operations

CHARTER AND PURPOSE

FRD 22H Manner of establishment and the relevant Ministers 5-6

FRD 22H Purpose, functions, powers and duties 5-6

FRD 8D Department objectives, indicators and outputs 5-6

FRD 22H Key initiatives and projects 25-27

FRD 22H Nature and range of services 5-6

MANAGEMENT AND STRUCTURE

FRD 22H Organisational structure 23


Legislation Requirement Page reference

Financial and other information

FRD 8D Performance against output performance measures 8-18

FRD 10A Disclosure index 83-84

FRD 12B Disclosure of major contracts 32-33

FRD 15E Executive officer disclosure 37

FRD 22H Employment and conduct principles 28

FRD 22H Occupational health and safety policy 29

FRD 22H Summary of the financial results for the year 24

FRD 22H Application and operation of Freedom of Information Act 1982 33

FRD 22H Compliance with building and maintenance provisions of Building Act 1993 34

FRD 22H Statement on Competitive Neutrality Policy 34

FRD 22H Application and operation of the Protected Disclosure Act 2012 34

FRD 22H Details of consultancies over $10,000 32

FRD 22H Details of consultancies under $10,000 32

FRD 22H Disclosure of government advertising expenditure 32

FRD 22H Disclosure of ICT expenditure 33

FRD 22H Statement of availability of other information 36

FRD 24D Reporting of office-based environmental impacts 35

FRD 25C Victorian Industry Participation Policy disclosures 31

FRD 29C Workforce data disclosures 30

Compliance attestation and declaration

SD 5.1.4 Attestation for compliance with Ministerial Standing Direction 37

SD 5.2.3 Declaration in report of operations 80

FINANCIAL STATEMENTS

Declaration

SD5.22 Declaration in financial statements 80

Other requirements under Sanding Directions 5.2

SD 5.2.1(a) Compliance with Australian accounting standards and other authoritative pronouncements 44

SD 5.2.1(a) Compliance with Standing Directions 6

SD 5.2.1(b) Compliance with Model Financial Report 81

Other disclosures as required by FRDs in notes to the financial statements

FRD 21CDisclosures of Responsible Persons, Executive Officers and other Personnel (Contractors with Significant Management Responsibilities) in the Financial Report

76-79

FRD 110A Cash Flow Statements 41, 61-62

FRD 114C Financial Instruments 63-65, 73-75

Legislation

Freedom of Information Act 1982 33

Building Act 1993 34

Protected Disclosure Act 2012 34

Victorian Industry Participation Policy Act 2003 31

Carers Recognition Act 2012 35

Disability Act 2006 35

Local Jobs Act 2003 31

Financial Management Act 1994 5, 32, 34, 37, 44, 80


With the exception of the Development Victoria Financial Statements and Additional Reporting Requirements, the information contained in this document is based on material and information collated by Development Victoria, its employees and consultants and from publicly available information.

Any interested party (including developers and their advisers) must make its own independent assessment and investigations and should not rely on the significance, adequacy or accuracy of this information.

This information does not purport to contain all the information a party may require. Development Victoria, its employees and consultants shall have no liability to any person under law of contract, tort, the principles of restitution or unjust enrichment or otherwise any loss, expense or damage which may arise from or be incurred or suffered as a result of anything contained in this document or otherwise arising in any way from the purchase of land from Development Victoria or building or development within any Development Victoria project.

© State of Victoria, Development Victoria, 2019.

This publication is copyright. No part may be reproduced by any process except in accordance with the provisions of the Copyright Act 1968.

While all reasonable efforts have been made to ensure the information contained in this document is accurate and correct at the date of its issue, Development Victoria is not responsible for any errors in or omissions from this document, whether arising out of our negligence or otherwise.

No investment opportunity or other matter referred to in this document in relation to the projects of Development Victoria considers the specific objectives, situation or needs of any other person and accordingly this report is not, and is not intended to be, advice on legal, financial, taxation or investment matters relating to any opportunities with Development Victoria.

L9, 8 Exhibition Street Melbourne 3000 VIC Australia GPO Box 2428 Melbourne 3001 VIC Australia

+61 3 8317 3400 development.vic.gov.au